Principle & Practice of Management

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Departmentation means “group of activities and employees into departments.” It is, as Allen wrote a means of dividing the large and monolithic functional organization into smaller, flexible administrative units. Departmentation, therefore, refers to the organizational device of classifying the activities or operations of an undertaking into
functionalised categories. Modern enterprises tend to be larger in size and complex in technological operations. All the activities cannot be managed by a single individual or the Board in a common sweep. Therefore, departments or sections are created for all major activities of the undertaking to bring the administrative and operational functions within a compact
compass of specialization and in the range of managerial convenience. The size of an undertaking may be large but departmentation solves the problem of management by compartmentalizing the big-sized undertaking into manageable units based on functions, area, product or process. Hence the departmentation enables large firms also to derive the benefits of small functional organization and at the same time softening the disadvantages that normally arise due to increasing size and diversity. Departmentation, limits the number of persons to be managed by inducting them into different departments. Thus, ensuring suitable span of control. It makes direction and controls effectively by confining the managerial focus to well-knit and functionally conceived units product-wise, process-wise or area-wise. Costs and revenues can be determined only if the enterprise is parcelled out into departments for administrative convenience. Allocation of duties, selection of specialized staff, fixation of responsibility will have the decisive character under departmentalised organizational set-up, sharing of authority and spreading of responsibility are the underlying factors of departmentation subject to the co-ordinating authority of the top management.

Process of Departmentation

Departmentation is done through the following processes:
1. Identification of tasks or duties.
2. Analysis of details of each task.
3. Description of the functions.
4. Entrusting the groups of functions to separate specialist heads and providing them with suitable staff.
5. Delineation of the scope of authority and responsibility of departmental heads.


[Types of Department Click here….]