DEPARTMENTATION

-BY Sumit kumarSINDHU WADHWAYAKEEN AGARWALAVarun bajaj

BBS I E

WHAT IS DEPARTMENTATION?

Departmentation means the process by which similar activities of business are grouped into units for the purpose of facilitating smooth administration at all levels.

It is process of dividing the large functional organization into small and flexible administrative units.

FEATURES

It increases the operating efficiency of employees.

It makes the executive alert and responsible in his/her duties.

It increases the prestige and skill of the departmental heads.

It helps in better co-ordination among the managerial personnel.

DEPARTMENTATION

SPECIALIZATION

CONTROL

CO-ORDINATION

SECURING ATTENTION

RECOGNITION OF LOCAL

CONDITIONS

ECONOMY

FACTORS

FORMS OF DEPARTMENTATION

FUNCTIONS

PRODUCT

CUSTOMER GROUPS

GEOGRAPHY

PROCESS

TIME

MARKETING CHANNEL

TYPES

DEPARTMENTATION BY ENTERPRISE FUNCTION

Grouping of activities according to the functions of an enterprise i.e. production, sales and financing.

Each department is headed by one responsible person who is liable to the general manager.

ADVANTAGES DISADVANTAGES

1. Is a logical reflection of functions

2. Maintains power and prestige of major functions.

3. Follows principle of occupational specialization.

4. Simplifies training5. Furnishes mean of tight

control at top.

1. De –emphasizes overall company objectives.

2. Overspecializes and narrows viewpoints of key personnel.

3. Reduces co-ordination between functions.

4. Responsibility for profits is at the top only

5. Slow adaption to changes in the environment.

6. Limits development of general managers.

DEPARTMENTATION BY PRODUCT

Grouping of activities based on the goods and services a company offers.

A single business unit may manufacture and sell different types of products.

Each department is responsible for manufacturing a product and selling it to its customers.

ADVANTAGES DISADVANTAGES

1. Better services may be provided to customers.

(uniform set of customers)

2. Helps in maximum utilization of personal efficiency of workers.

3. Proper attention may be devoted to the manufacturing of a product.

1.It increases the number of personnel which results in increase in cost of operation.2.It requires additional cost to maintain a sales force for each type of product.3.Machines and equipments in each product department may not be fully used.

DEPARTMENTATION BY CUSTOMER GROUP

Grouping activities that reflects a primary interest in customers .

It is preferred when the various needs of the customers are different in nature.

PRESIDENT

COMMUNITY –CITY BANKING

REAL ESTATE

CORPORATE BANKING

AGRICULTURAL BANKING

INSTITUTIONAL BANKING

STRUCTURE OF CUSTOMER DEPARTMENTATION IN A

LARGE BANK

ADVANTAGES DISADVANTAGES

1)Encourages concentration on customer needs.

2) Gives customers feeling that they have an understanding supplier.

3)Develops expertness in customer area.

1)May be difficult to co-ordinate between competing customer demands.

2)Requires managers and staff expert in customers problem.

3)Customer groups may not always be clearly defined (i.e.large corporate firms vs. other corporate houses)

DEPARTMENTATION BY TERRITORY

Grouping of activities by area or territory is common in enterprises operating over wide geographic areas.

e.g.the postal service of the country has adopted this system to provide like services across the nation.

ADVANTAGES DISADVANTAGES1) Places attention and

effort on product line 2) Facilitates use of

specialized capital,facilities,skills,and knowledge.

3) Permits growth and diversity of products and services.

4) Improves coordination of functional activities places responsibility for profits at the division level.

1) Requires more persons with general managers abilities.

2) Tends to make maintenance of economical central services difficult and mat require services difficult and may require services such as personnel or purchasing at the regional level.

3) Increases problem of top management control.

DEPARTMENTATION BY PROCESS

Grouping activities based on the work processes necessary to complete production of goods and services.

It is followed when the production activities are carried out in many places.

ADVANTAGES DISADVANTAGES

1)The costlier machines can be used effectively.

2)It helps top management to have effective performance control.

3)It is suitable to any business unit which manufactures a product passing through a number of processes.

1)Separate rooms for operation and facilities should be given to all the processes which results in high cost production.

2)It does not give good training to the staff members and there is a lack of overall development of managerial talents.

3)More specialities are essential to each process.

DEPARTMENTATION BY TIME

Grouping activities based on the time of the performance of business activities.

If the work is not completed within the normal working hours, extra time will be given to complete with the normal working hours, extra time will be given to complete it, only interested persons are requested to do the jobs and one person is responsible to supervise them .

Whatever be the work performed after the normal working hours, a separate department will be in charge of this type of activity.

DEPARTMENTATION BY MARKETING CHANNELS

Grouping of activities based on the channel of distribution chosen by a particular business unit.

Normally the channel of distribution is selected by the business unit on the basis of nature of goods and marketability of the product .

This method of departmentation has grown in importance as business has become increasingly market-oriented.

MATRIX ORGANIZATION

DEFINATION

Combines functional and divisional approaches to emphasize project or program .

Organization structure in which teams are formed and team members report to two or more managers.

MATRIX STRUCTURE A matrix is highly flexible form that is readily

adaptable to changing circumstances. Matrix structures rely heavily on committee and

team authority Some companies use the matrix organization

as a temporary measure to complete a specific project.the end of the project usually means the end of matrix.

Applies in diverse setting as manufacturing service industries, professional fields and the non profit sector.

ADVANTAGES

Better co-operation across functions.

Improved decision making Increased flexibility Better customer service Better performance accountability Improved strategic management

DISADVANTAGES

Two-boss system is susceptible to power struggles.

Team meeting in the matrix are time consuming.

Teams may develop “group it is” Requirements of adding team

leaders to a matrix structure can result in increases costs.

SBU Strategic Business Unit or SBU is understood as a

business unit within the overall corporate identity which is distinguishable from other business.

It happens because it serves a defined external market where management can conduct strategic planning in relation to products and markets.

The unique small business unit benefits that a firm aggressively promotes in a consistent manner.

When companies become really large, they are best thought of as being composed of a number of businesses (or SBUs).

HOW DID IT GOT ITS NAME

The phrase "Strategic Business Unit" came into use in the 1960s, largely as a result of General Electric's many units.

GE's divisions include GE Capital, GE Energy, GE Technology Infrastructure, NBC Universal and GE Home & Business Solutions

Companies today, however, often use the word “Segment” or “Division” when referring to SBU’s, or an aggregation of SBU’s that share such commonalities.

SUCCES FACTORS OF SBUs

The degree of autonomy given to each SBU manager.

The degree to which an SBU shares functional programs and facilities with other SBUs.

The manner in which the corporation is because of new changes in market.

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