Departmentation

The grouping of similar and logically connected activities of organization is called departmentation. This is one of the primary tasks in designing an organization structure. Departmenatation is a process where tasks are grouped into jobs, jobs into effective work groups and work groups into identifiable departments. It leads to grouping of both activities and personnel. A department may be called a division, branch, section or some other organizational unit.

The purpose of departmentation is to administer the enterprise in the best possible manner. It increases the operating skill and efficiently of an enterprise. Departmentation is basically the process of assigning fixed responsibility to an executive in charge of a particular department. It provides distinct advantages of division of labor and specialization.

The importance of departmentation can be explained from the following points:

• Departmentation provides the advantages of specialization of work.
• Departmentation helps in fixing the responsibility and consequently accountability for the results.
• Departmentation facilitates to development of managers.
• Managerial performance of the managers can be appraised more objectively through departmentation.
• Departmentation gives the feeling of autonomy, which provides the satisfaction and motivation leading to higher efficiency of operations.
• Departmentation facilities administrative and financial control.