Discuss the Meaning and Importance of Departmentation.

Meaning of Departmentation:

Departmentation means the creating a division in work organization so as to make an operation more cohesive and organized. Departmentation leads to grouping of activities into different departments on the basis of: Function, Product, Territory, Customer and) Process. These departments are semi autonomous and acts as independent activity contributing to the whole. Departmentation leads to decentralization, delegation of authority coupled with responsibility. Departznentation encourages specialization, innovation and technological and human resource development.

Importance of Departmentation.

Increases Efficiency: Grouping of activities and specialization help in the optimum use of all resource which increases efficiency.

Fixes Responsibility: Departmentalization leads to delegation of authority and accountability and fixes responsibility of the manager.

Managerial Appraisal: Appraisal of managerial responsibility becomes easy.

Better Budgeting: Departmental organization its function help in better budget allocation and utilization.

Specialization: Specialized activities can be carried out through effective departmentation.

Helps in Human Resources Development: Requirement of more skilled human resources is achieved through training and developments.

Coordination and Control: Departmentation helps the top management to control and coordinate in better manner.