Topics: Organization, Management, Department store Pages: 5 (1211 words) Published: December 18, 2013
After having discussed organisation, its importance and principles in the previousunit, now we shall explain the meaning and importance of the term “Departmentation” which forms the very basis of the organisation structure of any enterprise.

You have already noticed that organisation involves the dividing and grouping of the works to be performed in the enterprise on some logical basis so that team spirit can be developed. This grouping of activities and employees into various units for the purpose of administration is called departmentation. Concept and importance

Departmentation is a means of dividing the large functional organisation into smaller, flexible administrative units. It makes grouping of activities into units and sub-units created through departmentation which are known as department, division, section, branch etc. The process of departmentation takes place at all levels in the organisation. At the top level, the break up of functions into activities is called “Primary Departmentation”. Grouping activities into separate units at the middle level is called “Intermediate Departmentation” and at the lower level it is called “Ultimate Departmentation” or “Secondary Departmentation”. Let us discuss some definitions of Departments. 1. According to Louis Allen, “Departmentation is a means of dividing the large and monolithic functional organisation into smaller flexible administrative units.” 2. According to koonts and O’Donnell : “A department is a distinct area, division or branch of an enterprise over which a manager has authority for the performance of specified activities.” In short, we need departmentation in an enterprise to divide the activities along with authority, responsibility and accountability with sole objective to get the work done smoothly and in the best possible way.

Importance of Departmentation
The importance of departmentation is to facilitate successful operation and to create an environment for effective performance. Grouping of activities and employees into departments makes it possible to expand an organisation to a large extent. It enables the organisation to recapture some of the advantages of the small functional organisation while minimising the disadvantages of that which comes with increasing size, diversity and dispersion.

The importance of departmentation may be stated in the following way:

Specification : Departmentation helps to grow specification in various activities which leads to improving the efficiency of operation.

Feeling of autonomy : Departmentation gives independent charges to managers. The feeling of independence provides satisfaction and in turn increases their responsibilities and efficiency.

Fixation of responsibility : Through departmentation, responsibilities of the work can be precisely and accurately fixed. The authority and responsibility of each department is defined precisely.

Development of Management : The managers of each department perform specialised functions. They take independent decision and develop themselves for higher positions. Departmentation facilitates the development of managerial personnel by providing them opportunities for exercising initiatives.

Facility in Appraisal : Since the managers perform specified jobs, their performance appraisals become easier. Departmentation facilitates administrative control as standards of performance are laid down separately for each department.

Budget Preparation : It makes the preparation of budget for departments easier as well as for the organisation as a whole easier.

Proper Supervision : As the authority for making decisions is diffused to the managers of the departments and works are assigned to each individual department wise, supervision and control become easier. Principles

In this sections we will discuss the following principles of Departmentation 1. Principle of attainment of organisational objectives : It implies that departments are designed or...
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