Types of Departmentation

(a) (b) (c) Functions, e.g., sales, production, personnel, planning, transport, etc. Products, e.g., air-conditioners, accounting machines, electronic calculators, etc. Territory, region, or geographical area, e.g., Northern Railway, Western Railway, N.E. Railway, etc. Customer, e.g., wholesaler, retailer, government. Process. Appropriate combination of any of these types.

(d) (e) (f)

Function wise Departmentation
Under each of these five managers, there will be subordinate managers and under them, the subordinate staff. The advantages of this type of structure are as follows: (i) (ii) (iii) (iv) (v) (vi) It is a logical reflection of functions. It follows the principle of specialisation. Maintains power and prestige of major functions. Inter-departmental co-ordination is facilitated. The structure is simple, logical and easy to understand. Provides a good means of control at the top.

There are also some disadvantages: (i) (ii) Responsibility for profits tends to be at the top. There may be chances of heavy centralisation in decision-making.

(iii) Where geographical centralisation is desirable or required, this form becomes unsuitable. (iv) (v) This is not very suitable where product lines have to be emphasized. There is a lower potential for manager development.

Simplifies departmentation of profitability of each product line. Local conditions might warrant different types of selling. etc. Detailed information on markets for specific products will be generated. New department may be added without difficulty. Tends to make maintenance of economical central services difficult. Responsibility for profits is at the Division level. Proximity will reduce costs of operation and administration. Some of the disadvantages inherent in such departmentation are: (i) A customer has to deal with different salesmen or managers for different products of the same company. Places emphasis on local markets and problems. (ii) (iii) . Results in increased problems of the top management control. Permits growth and diversity of products and services. (iv) (v) (vi) (vii) Extremely suitable where product lines are complex or vary greatly. (viii) Furnishes measurable training ground for Managers. Places responsibility at lower levels. This is possible only in territorial departmentation. Improves co-ordination of functional activities. Duplication of costs on travel.Product wise Departmentation The advantages of this type of structure are: (i) (ii) (iii) Places greater effort on individual product line. (ii) (iii) (iv) (v) Territorial or Geographical Departmentation The advantages of such departmentation are: (i) Regional expertise is generated and managers can tackle customers or competition better. Better customer service arising from greater product knowledge. Extra costs of maintaining separate sales force for each product.

under employment of facilities and manpower specialized in terms of customer groups. 2. Increases problems of the top management control. The breakdown of activities is carried as far down as to determine the job of each individual. Unequal development of customer groups. And these divisional or departmental act5ivities are further divided into sections and jobs. Enterprise functions like sales. operating an managerial. Hence. Different bases are adopted for dividing and subdividing activities into different groups or blocks of work.(iv) (v) (vi) Improves co-ordination at the regional level. Problems of co-ordination might pose difficulties. The required activities are spelled out from the objectives of the enterprise. The total work. Production or finance. Determination and enumeration of activities. Correlated and similar activities are grouped into divisions or departments first. this type of structure is very useful. (ii) Where marketing channels are considerably different for various types of customers. Some disadvantages are listed as follows: (i) (ii) (iii) Involves higher costs of co-ordination and control from headquarters. Grouping and assignment of activities. Unsuitable for departments like Finance. Better face-to-face communication with local interests in mind. Some disadvantages of this type are: (i) May not be enough work for certain types of customers. Results in more managerial levels which increases overhead costs. (ii) (iii) 1. Better manager development. where no gains are possible by specialisation on local factors. (iv) Departmentation by Customers Some advantages of this type of structure are: (i) Greater specialized customer service. the . is broken down into component activities that are to be performed by all personnel.

2. withing the limits he is not free to act arbitrarily but subject to provisions of organisational policy. Secondary grouping is made on the basis of geographical areas. the other two aspects of delegation come into the picture. 'it is something like imparting knowledge. Delegation of authority. whether managers or operators. Corresponding to the nature of duties. so responsibility without authority is an empty vessel. 3. process or constituent parts of the major enterprise function. Allocation of fixed duties to definite persons. and on the basis of job descriptions. Wherever duties are assigned to subordinates. Authority once delegated can be enhanced. Delegation is the authorization to a manager to act in a certain way independently. reduced or withdrawn depending upon the requirement. Along with the allocation of duties to different positions. allocate the jobs among their subordinates. each job is to be staffed by the placement of qualified personnel. however a superior at the same time still retains authority. job requirements are first ascertained by the allocation of duties to different positions. The degree of delegation puts a manager to act within the limits prescribed by his superior. Absence of delegation in any enterprise implies that one person is performing the whole work of operation and management with nobody else to assist him. organisation climate. These job assignments are first made to different management members who. man specifications are prepared. positions are filled by selection. To make any systematic recruitment and selection. rules and regulation. In accordance with man specifications which indicate qualification and experience expected form candidates for different posts. Characteristics of Delegation 1. In such a situation. Division and subdivision of activities create a number of managerial and operating jobs which are bound together in a consistent pattern by the delegation process. types of customers. Definite job assignments are made to different subordinates for ensuring certainty of work performance. Delegation has a dual characteristic. in turn. Moreover. The changes in organization structure.products manufactured and territorial regions are usually made the basis of primary grouping. commensurate authority must be granted to the subordinates for enabling them to make adequate work performance. procedure. A superior delegates authority to subordinates. Authority and responsibility are correlated terms and they are terms to be constants companions. Delegation is a three tier concept that calls for assigning duties and delegating authority to subordinates and demanding accountability from subordinates. As authority without responsibility is a dangerous thing. As Terry has observed. but you still retain the knowledge too. You share with others who then possess the knowledge. 3. 4. equipments used. policy. and method require . no formal structure can be designed as there is no proliferation of activities into levels. it is obvious therefore that delegation is to be effected in some way or other. Fore establishing any organization structure. training and placement of individuals.

Delegation is specific when course of action for specific objectives are specified. it can be written or unwritten. Since. Similarly. . A manager cannot delegate authority which he himself does not process. Delegation may be specific or general. Moreover. he does not delegate the entire authority to his subordinates because if he delegates all his authority he cannot work. though objectives are specified.modifications in delegation of authority. 5. the authority can be recovered back fully in the case of his exit from the organisation. it is general when these are not specified. 4. authority is delegated to an individual.