After reading this article you will learn about:- 1. Meaning of Departmentalism 2. Methods of Departmentalism 3. Factors.

Meaning of Departmentalism:

When two or more people contribute their efforts together then an understanding as to “who does what” is necessary. The activities and objectives must be arranged in the form of duties that can be allotted to specific individuals and relationship be framed between these individuals so that their efforts are coordinated towards a predetermined goal. In other words, team must be organized.

The administrative process of organising the team consists of:

(i) Dividing and grouping the work, and


(ii) Defining the established relationship between individuals filling these jobs.

Departmentalism is the process of grouping activities into units for the purposes of admin­istration. This process takes place at all levels in an industry. For example in an industry, there may be sales department, production department, service department and so on.

Further, the sales department manager may divide his work among market research department, statistics department, advertising department, selling department, servicing department etc. This pro­cess of partitioning is generally called departmentalism.

Methods of Departmentalism:

There are large numbers of primary basic methods of departmentalism in an organisation structure, namely:


1. Grouping by products or services.

2. Grouping by locations.

3. Grouping by time.

4. Grouping by customers.


5. Grouping by processes.

6. Grouping by functions.

1. Grouping by Products or Services:

In this method, the main activities associated with a given product are organised under a single head and are largely used as the basis of departmentalism. For example, the work of the purchasing department may be divided accord­ing to different types of products to be served.


This method takes advantage of specialised product knowledge, promotes co-ordination of the various activities connected with the product (such as purchase, production, storage, sales and the tool) generally make it easier to place responsibility for the results achieved.

2. Grouping by Locations:

If the factory is a huge one in area then departmentalism can be done by divisional basis with a divisional manager in-charge of each division.

3. Grouping by Time:


It means the organisation can keep more than one shift. In this system, although the operations may be same as in the first shift but additional supervisory staff is required. The more difficult questions are: how fully served and self-contained each shift should be and what relationships should be set up between managers who work only in normal hours and the men who perform similar duties in the off hours.

4. Grouping by Customers:

This type of departmentalism can be found in sales activi­ties. For example a big restaurant can serve regular meals in a big hall and maintain an espresso bar separately.

5. Grouping by Processes:


Departmentalism on a process basis can be found both in manufacturing and in distribution activities. For example, a Hosiery Mill may have separate departments of knitting, steaming, cutting, sewing, trimming, pressing, inspection, packing and shipment. This method has the advantage of expertness that comes with concentration on the single process and when the process is performed at one place, the improvement in supervi­sion occurs.

6. Grouping by Functions:

Today, due to much advancement there is growing complexity of administration in all types of business. In such industries, functional departmentalism has become increasingly popular and the organisation structure may be built by setting up depart­ments by functions, such as sales, accounting, personnel, inspection, purchasing, production etc.

Factors of Departmentalism:

While framing various departments, following main factors are taken into consideration:


1. Specialisation.

2. Control.

3. Co-ordination.

4. Securing attention.

5. Recognition of local conditions.

6. Economy.

1. Specialisation:


It means breaking up the work into simple process and sub-process. Specialisation is a necessity to have economic growth in the industry and to increase the pro­duction power of labour.

Department should be framed in such a way so as to secure the advan­tage of specialisation. Specialisation may be functional as in establishment of separate depart­ments for sales, finance, production and accounts etc. or by-products, as the work within the purchasing department is mostly specialized by products rather than functions.

2. Control:

It is the most important job of administration. Control means to assume that performance conforms as nearly as possible to plans. Departmentalism can simplify the manager’s work of control.

As a general rule, one activity intended to serve as a check on another should be under a separate manager. For example, the inspection should not be under the indirect control of a person who is responsible for output, unless the quality is of average importance.

3. Co-ordination:

Departmentalism is only one of the ways for achieving co-ordination. Co-ordination means to combine activity into a consistent and harmonious action. Sometimes different activities need to be grouped under a single manager, as the activities need to be closely co-ordinated. For example, a trained cricket team, the members of which willingly re­spond to their instructor and captain demonstrates good examples of the highest form of co­ordination.

Similarly, in manufacturing industry, often raw material inventory control and pur­chasing are under the same officer, even though the nature of work is quite different. Here a knowledge of stock on hand and quantity of consumption must be related to the ordering of new supplies.

4. Securing Attention:


If there is a very important activity which requires special atten­tion then it may be placed in a separate division and also at a higher level in the administrative hierarchy.

For example, in a Chalk Industry, the production foreman himself can do the inspec­tion while in a precision instrument factory, where the quality control is more important, the inspection will be done by separate independent department. Similarly, in an aircraft plant, where reliable quality is vital for the success of the enterprise, the inspection should be under the General Manager.

5. Recognition of Local Condition:

The departmentalism should take into consideration the local conditions at the place concerned.

Here three aspects are considered:

(a) Adjustment should be made according to the availability of personalities,

(b) To recognise normal groups, and


(c) To provide full-time jobs.

6. Economy:

The additional expenditure is needed in creating various departments. Each separate department will require executives, separate staff and such other aspects, therefore, proper consideration must be paid to this aspect.

It is to note that the least expensive arrangement is not necessarily be the best one, as sometimes it becomes ineffective but if a more elaborate arrangement is adopted, then addi­tional benefits should clearly exceed the additional expenses.