Banks, insurance companies, transport companies, distribution agencies, etc. Advantages of departmentation by territory: 1. It helps to reduce transportation and distribution costs. It facilitates the expansion of business in various regions. There is better coordination of activities in a locality through the establishment of regional divisions.
It offers a regional manager the opportunity to gain extensive experience in the complete management of the operation in a given territory. Special attention may be given to local customer groups. Disadvantages of departmentation by territory: 1.
The coordination and control of the different branches from headquarters become less efficient. This may not be economical because of the costly duplication of staff and physical facilities. Various regional units may become so absorbed by short-term competition between them that the long-term general interests of the organization as a whole may be neglected.
Due to the duplication of physical facilities, operating costs are generally high. There may be a conflict between regional managers. Departmentation by customers:. This type of classification is adopted by companies offering specialized services. To draw attention to heterogeneous buying groups in the market, marketing activities are often divided into several parts.
This type of departmentation is useful for companies that sell a product or service to a number of clearly defined customer groups. For example, a large, ready-to-use clothing store may have a separate department for men, women, and children. A bank may have separate credit departments for large and small entrepreneurs. Advantages of Departmentation by Customers: 1.
The benefits of specialization can be obtained. The company can gain a thorough understanding of the needs of each category of customers. Special attention may be given to the tastes and preferences of each type of customer. Different types of customers can be easily satisfied by specialized staff. Customer satisfaction enhances the acquisition of goodwill and the sale of the business. Disadvantages of departmentation by customers: 1. It can be difficult to maintain coordination between different client departments.
Customer service managers can lobby for specific benefits and facilities. This can lead to duplication of activities and significant overhead. There may be duplication and underutilization of facilities and resources. Departmentation by process:. In each departmentation, activities are grouped according to the production processes or equipment used.
This is generally used in manufacturing and distribution companies and at lower organizational levels. For example, a textile factory can be organized into ginning, spinning, weaving, dyeing and finishing departments. Similarly, a printing press may have departments of composition, proofreading, printing, and binding. This departmentation can also be employed in the engineering and petroleum industries.
Advantages of departmentation by process: 1. This simplifies the supervision and layout of the facility. The benefits of specialization are available. It offers an economy of operation 4. Efficient maintenance of equipment is possible. It provides the benefits of the required specialization at each level of the total process. Disadvantages of departmentation by process: 1. This type of department may not provide an opportunity for the full development of management talent.
Due to a specialized activity, employee mobility is reduced. It can be difficult to coordinate the activities of different departments 4. Extreme specialization can reduce the flexibility of operations. Great job Thanks for ur valuable information. This is the website gives more simplest way to understanding concepts. I am getting more confidence. Absolutely fantastic. Thanks to the team working behind this site.
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This was very helpful as I am using this information for an internal. In these units, every manager is given adequate freedom. The feeling of autonomy provides job satisfaction and motivation which in turn lead to higher efficiency of operations.
Departmentation enables each person to know the specific part he is to play in the total organization. It provides a basis for building up loyalty and commitment. The responsibility for results can be defined more precisely and an individual can be held accountable for performance.
Appraisal of managerial performance becomes easier when specific tasks are assigned to specific personnel. The sources of information, the skills and competence required for total managerial decisions can be located. Departmentation facilitates communication, coordination and control.
It simplifies the training and development of executives y providing them opportunities to take independent decisions and o exercise initiative.
Departmentation is a means of dividing the large and complex oranisation into small and flexible administrative units.
Grouping of activities and personnel into manageable units facilitates administrative control. Standards of performance for each and very department can be precisely determined. Excessive departmentation may result in several organisational problems such as erosion of the line of command, multiple accountability, dysfunctional conflicts and difficulty of coordination and control. What steps are necessary for Departmentation?
The various steps involved in departmentation are: To identify task or duties; To analyse details of each task; To describe the functions or to group similar activities. To entrust the grouped activities to departmental heads and. What is control process? The control process is the system that allows setting, measure, match and tweak any business activities such as production, packaging, delivery and more.
The control process is the functional process for organizational control that arises from the goals and strategic plans of the organization. What do you mean by MBO? Management by objectives MBO is a strategic management model that aims to improve the performance of an organization by clearly defining objectives that are agreed to by both management and employees.
The term was first outlined by management guru Peter Drucker in his book, The Practice of Management. What are the three levels of management? Executive or Middle Level Management: The line and departmental managers form this level of management. What are the advantages and disadvantages of functional departmentalization?
Advantages of functional departmentalization Simplifies training and supervisor of the subordinates. Furnishes means of tight control at the top. Each department can be staffed by experts in that functional area.
Coordination of activates within the departments is easy. What is the advantage of departmentalization by patient? The advantage of departmentalization by patient is that: Resources are applied the same for all patients.
It reduces resource duplication. Managers become patient advocates. What is product departmentalization? Product departmentalization - Grouping activities by product line.
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