Departmentalization (or simply departmentation) refers to the grouping of This helps the organisation to assign the work only to those who are best suited. Departmentation can provide a necessary degree of specialisation of executive activity for efficient performance. It can simplify the tasks of management within a . In the words of Allen, “Departmentation is a means of dividing a large and monolithic functional organisation into smaller, flexible, administrative units.”.

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Here we detail out the need and significance of departments, process involved and dangers of departmentation and factors influencing assigning of activities.

Organisation involves dividing and grouping of activities to be done in an enterprise. Division of work means the identification of activities departmntation are to be done for the achievement of organisational goals. After identifying various activities, these are grouped together on some logical basis.

Departmentation is the process of departmetation various activities into separate units of departments. A department is a distinct section of the business establishment concerned with a particular group of business activities of like nature.

The actual number of departments in which a business house can be divided depends upon the size of establishment and its nature. A big business enterprise will, usually, have more departments as compared to a small one.

It is an established fact that there is a limitation on the number of personnel an enterprise or a supervisor can directly control. This limitation of control restricts the size of the enterprise unless it divides and groups departmentatikn activities into departments.


Notes on Departmentation: Meaning, Importance and Basis | Organisation

Departments comprise a framework for an organisation and enables it to expand indefinitely. It increases the efficiency of the enterprise since various activities are grouped into workable units. It renders the task of fixation of accountability dpartmentation results very easy since activities are well defined and responsibilities are clearly laid. It provides for fixation of standards for performance appraisal and thus ensures effective control.

It creates opportunities for the departmental heads to take initiative and thus develop managerial facilities. To entrust the grouped activities to departmental heads and. There are a few dangers of departmentation which should be taken care of while assigning and grouping of activities: Dividing the business house into various departments makes the co-ordination of various activities very difficult. To achieve individual efficiency, one department may work against the interest of another department thus reducing the overall efficiency and profitability of the business as a whole.

Departmentation: Need, Significance and Process

Departmentation creates difficulties of communication among the various departments of the organisation and renders planning and control more difficult. Departmentation increases the levels of management which is more expensive and it also increases the gap between the top management and the workers.

The following factors are to be taken into consideration while kn activities into departments: While assigning activities into departments, care must be taken to ensure that the benefits of specialisation are achieved. One of the primary aims of departmentation is to facilitate control. Departments should be so created as to fix clear responsibilities so as to enable effective control. Another factor that influences the assigning of activities should be grouped in such a manner that it does not become very difficult to co-ordinate the different activities of the business.


It is necessary to get the co-operation of everybody in the organisation to make it a success. The goals of the business are common and departmfntation should try to achieve them in their respective fields.

There should be some agency to co-ordinate the organisaton of various departments. Sales department should know the plans of production department and vice-versa. Similarly, other departments should also work in co-ordination with each other. A central body should act as a coordinating body.

Departmentation: it’s Meaning and Definition – Explained!

There are certain activities which are very crucial. Such activities should be placed in separate divisions. While assigning activities proper emphasis should be given to local conditions at the places concerned, viz. Another important factor to be considered while creating separate departments is the expense involved and economy in its operations.

Quick Notes on Departmentation. Role, Steps for Designing and Its Features. Factors Influencing the Span of Supervision.