Types of Departmentation


Functional Departmentation,basic or organic functions are the functions the performance of which is vital and essential to the survival of the Organisation. For example production, sales, financing and personnel are basic functions in a manufacturing enterprise.

Product Departmentation, in a product Departmentation ,every major product is organised is a separate department. Each department looks after the production,sales and finance of one product. Product Departmentation is useful when product expansion and diversification , manufacturing and marketing characteristics of the product expansion and primary significance.

Territorial Departmentation, this is a very useful to a large scale enterprise whose activities are geographically spread. Banks , insurance companies, transport companies, distribution agencies are examples of such enterprises. Under territorial or geographical Departmentation activities are divided into zones, divisions and branches.

Customer Departmentation , activities are grouped according to the type of customers, a large cloth store may be divided wholesale retail and export divisions. This type of Departmentation is useful for banks departmental stores .

Equipment Departmentation, this is generally used in a manufacturing enterprise and at lower levels of Organisation , a textile mill may be organised into ginning , spinning, weaving and dyeing departments.

Time Departmentation, under this basis, activities are grouped on the basis of the time of their performance, for example a factory operating twenty four hours may have three departments,one each for morning,day and night shifts.

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