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PDepartmentation means the process
by which similar activities of
business are grouped into units for
the purpose of facilitating smooth
administration at all levels.
PÌt is process of dividing the large
functional organization into small
and flexible administrative units.
PÌt increases the operating efficiency
of employees.
PÌt makes the executive alert and
responsible in his/her duties.
PÌt increases the prestige and skill of
the departmental heads.
PÌt helps in better co-ordination
among the managerial personnel.
DEPARTMENTATÌON
SPECÌALÌZATÌON
CONTROL
CO-ORDÌNATÌON
SECURÌNG
ATTENTÌON
RECOGNÌTÌONOF
LOCAL
CONDÌTÌONS
ECONOMY

A
C
T
0
R
S
I
Y
F
E
S
PGrouping of activities according
to the functions of an enterprise
i.e. production, sales and
financing.
PEach department is headed by
one responsible person who is
liable to the general manager
I. Is o IoqicoI refIecfion of
funcfions
Z. Moinfoins power ond presfiqe
of mo¡or funcfions.
3. FoIIows principIe of
occupofionoI specioIizofion.
4. SimpIifies froininq
b. Furnishes meon of fiqhf
confroI of fop.
I. De -emphosizes overoII
compony ob¡ecfives.
Z. OverspecioIizes ond norrows
viewpoinfs of key personneI.
3. Peduces co-ordinofion
befween funcfions.
4. PesponsibiIify for profifs is
of fhe fop onIy
b. SIow odopfion fo chonqes in
fhe environmenf.
o. Limifs deveIopmenf of
qeneroI monoqers.
PGrouping of activities based on the
goods and services a company
offers.
PA single business unit may
manufacture and sell different types
of products.
PEach department is responsible for
manufacturing a product and selling
it to its customers.
I. 8effer services moy be
provided fo cusfomers.
(uniform sef of
cusfomers)
I. HeIps in moximum
ufiIizofion of personoI
efficiency of workers.
Z. Proper offenfion moy be
devofed fo fhe
monufocfurinq of o
producf.
I.If increoses fhe number
of personneI which resuIfs
in increose in cosf of
operofion.
Z.If requires oddifionoI
cosf fo moinfoin o soIes
force for eoch fype of
producf.
3.Mochines ond equipmenfs
in eoch producf
deporfmenf moy nof be
fuIIy used.
PGrouping activities that
reflects a primary interest in
customers .
P Ìt is preferred when the
various needs of the
customers are different in
nature
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STRUCTURE OF CUSTOMER
DEPARTMENTATÌON ÌN A
LARGE BANK
.:.·..cts ::s.:.·..cts
I) Encouroqes
concenfrofion on
cusfomer needs.
Z) 0ives cusfomers
feeIinq fhof fhey hove
on undersfondinq
suppIier.
3) DeveIops experfness in
cusfomer oreo.
I) Moy be difficuIf fo co-
ordinofe befween
compefinq cusfomer
demonds.
Z) Pequires monoqers ond
sfoff experf in
cusfomers probIem.
3) Cusfomer qroups moy
nof oIwoys be cIeorIy
defined (i.e.Iorqe
corporofe firms vs.
ofher corporofe
houses)
PGrouping 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.
.:.·..cts ::s.:.·..cts
1· Places attention and
effort on product
line
2· Facilitates use of
specialized
capital.facilities.skil
ls.and knowledge.
3· Permits growth and
diversity of
products and
services.
4· ¡mproves
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· ¡ncreases problem of
top management
control.
PGrouping activities based on the
work processes necessary to
complete production of goods
and services.
PÌt is followed when the production
activities are carried out in many
places.
.:.·..cts
::s.:.·..cts
I) The cosfIier mochines
con be used effecfiveIy.
Z) If heIps fop
monoqemenf fo hove
effecfive performonce
confroI.
3) If is suifobIe fo ony
business unif which
monufocfures o producf
possinq fhrouqh o
number of processes.
I) Seporofe rooms for
operofion ond fociIifies
shouId be qiven fo oII
fhe processes which
resuIfs in hiqh cosf
producfion.
Z) If does nof qive qood
froininq fo fhe sfoff
members ond fhere is o
Iock of overoII
deveIopmenf of
monoqerioI foIenfs.
3) More specioIifies ore
essenfioI fo eoch
process.
P Grouping activities based on the time of the
performance of business activities.
P Ìf 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 .
P Whatever be the work performed after the normal
working hours, a separate department will be in
charge of this type of activity.
P Grouping of activities based on the channel of
distribution chosen by a particular business
unit.
P Normally the channel of distribution is selected
by the business unit on the basis of nature of
goods and marketability of the product .
P This method of departmentation has grown in
importance as business has become
increasingly market-oriented.
PCombines functional and
divisional approaches to
emphasize project or program .
POrganization structure in which
teams are formed and team
members report to two or more
managers.
P A matrix is highly flexible form that is
readily adaptable to changing
circumstances.
P Matrix structures rely heavily on committee
and team authority
P 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.
P Applies in diverse setting as manufacturing
service industries, professional fields and
the non profit sector.
PBetter co-operation across
functions.
PÌmproved decision making
PÌncreased flexibility
PBetter customer service
PBetter performance accountability
PÌmproved strategic management
PTwo-boss system is susceptible to
power struggles.
PTeam meeting in the matrix are time
consuming.
PTeams may develop "group it is¨
PRequirements of adding team
leaders to a matrix structure can
result in increases costs.
P Strategic Business Unit or SBU is understood as a
business unit within the overall corporate identity
which is distinguishable from other business.
P Ìt happens because it serves a defined external
market where management can conduct strategic
planning in relation to products and markets.
P The unique small business unit benefits that a firm
aggressively promotes in a consistent manner.
P When companies become really large, they are
best thought of as being composed of a number of
businesses (or SBUs).
P Ihe phrose "$troteg|c 8us|ness bn|t" come
|nto use |n the 1ºó0s, |orge|v os o resu|t
o| Genero| E|ectr|c's monv un|ts.
P GE's d|v|s|ons |nc|ude GE Cop|to|, GE
Energv, GE Iechno|ogv In|rostructure, N8C
bn|verso| ond GE Home & 8us|ness $o|ut|ons
P Compon|es todov, however, o|ten use the
word "$egment" or "D|v|s|on" when re|err|ng
to $8b's, or on oggregot|on o| $8b's thot
shore such commono||t|es.
PThe degree of autonomy given to
each SBU manager.
PThe degree to which an SBU shares
functional programs and facilities
with other SBUs.
PThe manner in which the
corporation is because of new
changes in market.

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