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Dividingworkonthebasisofthe
specializationisknownasdepartmentation.

Departmentation isameansofdividingalarge
organizationintosmaller,flexibleunits.

Departmentation meanstheprocessbywhichsimilar
activitiesofthebusinessaregroupedintounitsforthe
purposeoffacilitationsmoothadministrationatalllevel

AccordingtoKoontzandODonnell,Departmentation is
aprocessofdividingthelargemonolithicfunctional
organizationintosmallerandflexibleadministrativeunits.

Departmentation referstotheclassificationofactivities
onoperationsofanundertakingintofunctionalized
categories.Itiscreatedinproductwise,processwiseor
areawise.Itensuresproperdirectiontoandcontrolon
them.

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1.FunctionalDepartmentation
2.ProductwiseDepartmentation
3.TerritorialorGeographicalDepartmentation
4.ProcesswiseDepartmentation
5.CustomerwiseDepartmentation
6.TimewiseDepartmentation

Thisisthesimplestandmostprevalentbasisfor
departmentation.Underthisallthefunctionsof
similarnaturearedividedindifferentunitswhich
arecalleddepartments.
EXAMPLE:Thefunctionsofmanufacturingconcerncan
bedividedintoproductiondepartment,
marketingdepartment,financialdepartmentand
personneldepartment.Againsubdepartments
canbeestablishedineachdepartment.

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Productdepartmentationinvolvesthegroupingtogether
ofalltheactivities
necessarytomanufactureaproductor
productline.

EXAMPLE:Inanautomobileorganizationthe
departmentationcouldbecardivision,truck
division,busdivision.

* Departmentationbyterritoryorgeographymeans,
Groupingofactivitiesbyareaorterritoryiscommonin
enterprisesoperatingoverwidegeographicareas.
*Organizationswhichareinvolvedinbanking,insurance,
transportation.
*EXAMPLE: Indiacouldbedividedintonorth,south,east,west,
centralzones.
*FurtherNorthZonecanbedividedintoChandigarh,NewDelhi,
Ludhiana.

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*Inthisprocessinvolvedinproductionorvarioustypesof
equipment'susedaretakenasbasisofdepartmentation.
*Thebasicaimtodoprocessdepartmentationistoachieve
economicbenefit.
*EXAMPLE:Processdepartmentationincaseoftextile
organizationcanbebydividingtheproductionintospinning,
dyeing,weaving,finishingdepartments.

*Groupingofactivitiesaroundmarketingchannelsinvolves
makinganorganizationstructurereflectthewaysan
organizationreachestheultimatecustomer.
*Advantageofthistypeisthatitfocusesoncustomerwho
aretheultimatesuppliersofmoneytotheorganization.

EXAMPLE:Inpharmaceuticalcompaniesdifferentcustomers
couldbedoctors,hospitals,government,retailstores.
*Furtheritcouldbewholesale,retail,export.

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*Insomeorganizationswhereworkisperformedthrough
dayandnight,theworkisdividedintoshifts.
Thuswhenanorganizationmayoperatesonthreeshifts,
threedifferentdepartmentsmayexist.