Organizational

managemant
DEPARTMENTATION

DEFINITION
 Departmentalization can also be defined as
the process of breaking down an
organization into various dept.
 Departmentation can also be defined as
identifying and grouping of similar activities
based on some logic and organizing works
which allows persons to attain the goals of
organization.
Organization Before
Organization After
Departmentation
Departmentation
 Horizontal dimension
 Growth in number of employees, segment
it into various department
 Its for better control and mgt.
 Grouping of similar activities and related
people
 It limits the number of subordinate of
manager
e.g.
Mktg, Production, Design,R & D , Stores,
Maintenance, software development
CEO

Production Finance Mktg Personnal

Advt. Sales Mkt.Re

search
 Department can be made on the
basis of:
1. Functions 6. Numbers
2. Products 7. Time of study
3. Territory 8. Service
4. Customers
5. Process
 Process Of Departmentation

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ADVANTAGES OF DEPARTMENTATION

 Master work is divided into many

task
 More concentration
 Easy control
 Simple work
 Less complication
 Less confusion
 Less overlapping of work
 Fast growth
 Smooth administration
 Fixed job responsibility
 Better customer service
 Opportunity to take initiative
 Reduced conflicts
Forms Of Ownership
 Sole Proprietorship
 Partnership
 Joint Stock Co.
 Private ltd.

 Public ltd.

 Co-operative society
 Govt. sector
 Govt. dept

 Public corporation

 Public co.
Sole Proprietorship

 Definition: Proprietorship is a form of

business owned and managed by a
single person.
 Oldest type of business
 It is single ownership
 Whole and sole authority is a single
person
 Owner is responsible for profit n loss
ADVANTAGES

 Easy to form business

 Flexibility in business
 Quick decision
 No sharing in profits
 No conflict, no cold war
 No corruption
 Freedom of work
 Less documentation
Limitations

 No sharing of loss
 Highest responsibility
 Limited resources available
 Overloading
 No delegation of work
 Little growth rate
 Uncertain life of business
Applications

 Small mfg units

 Hardware enterprise
 Software co.
 Fabrication shop
 Press sop
 Maintenance shop
 Service centre
 Construction business
Partnership
 Relationship between persons who have
agreed to share the profits of business
carried on by all or any of them acting for
all.
 When two or more persons come together,
partnership exist
 For general business
 Minimum no. of member is 2.

 Maximum no. of member is 20

 For banking business: it is10

Types of partnership

 General partnership
 Limited partnership
Types of partners

 Active partners
 General partners
 Sleeping partners
 Nominal partners
 Secret partners
 Minor partners
Joint stock companies

 An association of individual, called as

shareholders
 Investment in terms of shares
 Share is also one source of finance
 Preferred ownership
 Shareholder receive profit-dividend.
Dividend proportional to no. of share
 The Indian companies act, 1956
defines co.as artificial person
Features

 Separate legal entity

 Managed by BOD
 Need to pay tax
 Limited liability
 Shares-easily transferable
Private ltd co.

 Shareholders are private members

 Co.ltd as ltd liability
 Min member:-2, Max member:-50
 Max no of directors:-2
 Less doc.
 Financial budget is compulsory
 Audit of accounts is necessary
Public ltd. Co.

 Shareholders are general people

 Min member:-7, Max member:-no
limit
 Max no of directors:-3
 Memorandum of association,Article of
association, consent of directors, list of
directors are necessary
 More funds available
 E.g.Bajaj auto ltd,tata motors, sony
Co-operative society

 Voluntary association of individuals

who work together to promote their
economic interest
 Private ownership
 Main motive is service but not profit
 Principle of democracy
 Min member:-10
 Max member:-no limit
Govt.Sector

 State enterprise
 Involvement of govt.
 Main motive is service not profit
 Profit given to govt
 For social welfare
Objective

 To provide goods or service at

resonable price
 To accelerate economic growth
 To provide employment to masses
 To look after and well being of
masses
 To minimize exploitation of worker
Three Types Of Govt. Sector

 Govt. departmental organization

 Public corporation
 Govt.company.
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