This article will help you to learn about the diffrerence between functional and divisional departmentation.
Difference between Functional and Divisional Departmentation
Difference – Functional Departmentmentation
1. Basis:
In functional departmentation, departments are created on the basis of functional areas (production, marketing etc.)
2. Specialisation:
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It is with respect to activities of all products. Production activities of all products (one or more) are looked after by production manager.
3. Control and coordination:
Complex if the organisation is producing multiple-products and selling in multiple market areas.
4. Fixation of responsibility:
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Fixation of responsibility in functional departmentation is not possible.
1. Costs:
Functional departmentation is a less costly form of departmentation.
2. Autonomy:
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Managers do not enjoy autonomy of making decisions. They are guided by decisions of top managers.
3. Suitability:
Functional departmentation is suitable for small and simple organisations that produce limited products and sell in limited geographical areas.
Difference – Divisional Departmentation
1. Basis:
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In divisional depratmentation, departments are created on the basis of specialised divisions.
2. Specialisation:
It is with respect to each area. Production activities of each product in each area are looked after by product or geographic manager.
3. Control and coordination:
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Simple for each departmental manager as he controls and coordinates only one product or market area. However, departmental managers find it difficult to coordinate with top managers.
4. Fixation of responsibility:
Can be fixed. Departmental manager is responsible for profits or losses of his departmental activities.
5. Costs:
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Divisional depratmentation is a costly form of departmentation. as there is multiplication of functional activities.
6. Automony:
Managers of each department have autonomy to make decisions.
7. Suitabillity:
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Suitable for large and dynamic organisations that produce multiple products and sell in wide geographical areas.