After reading this article you will learn about Departmentation:- 1. Meaning of Departmentation 2. Departmentation (Grouping into Sections, Departments and Higher Administrative Units) 3. Bases.

Meaning of Departmentation:

We have to divide the work to be performed. First we have to group tasks to form individual jobs. This is called arranging the manageable units for individuals. Then we have to form sections. A section is a group of workers under one supervisor.

Then sections are grouped to form larger administrative units such as departments and divisions. Departmentation is the process of analysing, dividing and arranging work or activities into manageable portions for individuals, sections, and departments. Thus, departmentation is the organisation-wide division of work.

Logical grouping of activities gives us:


(a) Individual jobs,

(b) Sections and

(c) Departments.

Work Organisation:


Grouping Tasks to Form Individual Jobs: Under the principle of specialisation, according to Taylor, “The work of every person in the organisation should be confined to the performance of single leading function.” Adam Smith was the first to indicate the advantages of division of labour and specialisation.

Specialisation gives a number of advantages such as:

(a) Use of scarce ability,

(b) Development of skill,


(c) Reduction of training,

(d) Higher use of machine and

(e) Mechanisation and standardisation.

However, over specialisation increases interdependence and makes co-ordination difficult. This is clearly stated by Robinson and Urwick. As coordination becomes more difficult, more supervision is involved. The advantages of minute division of labour have been over-exaggerated. Conveyor or assembly work later on revealed that minute division of work leads to repetitive and boring work.


The job becomes meaningless and uninteresting. As jobs become highly specialised they tend to become routine, repetitive and often cause fatigue and boredom. In recent years, the problem of job design has been considered by human relations writers and behavioural scientists.

Modern management has recognised the importance of job contents themselves acting as motivators and jobs are now designed to meet the needs for affiliation (close association) ego and self-actualization.

The new techniques of job rotation, job enlargement (job enlargement is built on related values, pride of workmanship and satisfaction on the job) and job enrichment (jobs are made meaningful) are expected to provide meaningful and interesting jobs to employees. A job itself should be motivating and challenging to the worker.

While designing the jobs for employees, we should offers:


(1) Variety in jobs,

(2) Reasonable autonomy in scheduling work, determining equipment and procedure and,

(3) Feedback of regular information regarding work performance to employees.

As far as possible, an employee should be given a whole piece of work and he should be able to identify results of his efforts. Finally, in designing jobs, workers should be permitted to participate in the planning process, i.e., grouping of activities for a job.

Departmentation (Grouping into Sections, Departments and Higher Administrative Units):


A section can be defined as a group of workers under one supervisor. Sections are grouped to form larger units such as departments, and departments in turn may be grouped into divisions.

Four factors are involved in the problems of departmentation:

(1) Span of control to ensure that the manager is not given too many subordinates:

(2) Grouping should achieve the economies of scale of operations;


(3) Grouping must ensure co-ordination of activities and

(4) Key activities are grouped directly under higher management.

Bases of Departmentation:

We have the following recognised and accepted bases of departmentation:

(1) Function,

(2) Product,

(3) Customer,


(4) Geography,

(5) Process and

(6) Sequence.

Let us describe briefly these alternative ways of departmental ion adopted in the process of organisation.

1. Function or Purpose:

Departmentation by business function is a very familiar form of division of work. Activities are grouped around functions such as production, finance, marketing and personnel. It is recommended on purely logical grounds. Specialised departments should not lose sight of their role in the total organisation.


2. Product:

Large companies with many product “lines create managerial units based upon the product. This is sometimes called divisionalisation. One division is in charge of one line of products. It may be an autonomous unit with its own functional departments. Each division should not lose sight of its relationship with the entire organisation.

3. Customer:

Departmentation by customer is done by General Electric Company in order, to serve as a supplier for many different customers.

These include:

(1) Aerospace,


(2) Construction,

(3) Consumer Products and

(4) Power Generation.

Retail stores may organise special departments to cater to teenagers, collegians, brides, and adult people.

4. Geography:

Due to poor transport and communication, at one time, departmentation was justified on territorial or geographical basis. We may have regional organisations for production and marketing. Life Insurance Corporation has zonal and regional departments.


5. Process:

At the plant level, we may have departmentation on the basis of process, e.g. departments for milling, lathe-work, painting, etc. Physically scattered operations create difficulty of co-ordination.

6. Sequence:

Sometimes alphanumeric or time sequence may act as a basis for departmentation. For example, book-keeping section may be divided into two units, one unit for posting customers’ accounts with letters A through M and the other unit with letters N through Z.

Mixed Departmentalisation:

In practice, an organisation may use one or more bases of departmentalisation. For instance, a national multiproduct diversified corporation may adopt geographical, product-wise divisionalisation and within the division we may have functional base having functional departments like production, finance and marketing.