Saturday, December 11, 2010


Organization involves identifying the activities necessary to attain the objectives of the enterprises and the grouping of similar activities on some logical basis so that a team can be organized. Departmentalization may thus be defined as the process of grouping activities into units and sub-units for purpose of administration. The administrative units and sub-units so created may be designated as divisions, units, branches, sections, jobs etc
According to R.D. Agrawal - '' departmentalization represents the pattern of grouping activities.''
According to Y.K.Bhusan - ''departmentation is the process of grouping into units for the purpose of administration.''
In conclusion, we can say that departmentalization is a means of dividing the large and complex organization into smaller, flexible administrative units.It is the organization wide division of work into various manageable units.
Departmentalization by function.
It refers to grouping activities of the enterprises into major functional departments.An enterprise may have separate division for production, sales and purchases, accounts and personnel. These primary functional departments can further be divided to form secondary departments.For example, as the enterprises grows in size,sales departments may be replaced by a marketing department.The marketing department may further be divided into marketing research, advertising and promotion and sales departments.
  • Economy of operation,
  • Occupational specialization and development of expertise,
  • Adoption of logical and comprehensible structure,
  • Maintains power and prestige of major functions.
Departmentalization by territory
Under this classification the market area is broken up into sales territories and a responsible executive put in charge of each territory. The territory may be known as district. division or region. The field salesmen under the respective region report to their corresponding sales supervisors, if any, who are responsible to their respective regional managers.
  • Enables managers to consider the governing the social forces such as habits , customs, styles , culture in a particular region or territory.
  • Suitable for large organization,
  • Easy to set profit level and performances target,
  • May save transportation cost,
  • Enables managers to consider the integrated view of the total organization.


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