Departmental organisation is one of the most widely used forms of business and institutional structuring. It divides a company into various departments based on specific functions or activities. Each department focuses on a particular task, such as marketing, finance, human resources, or production. This structure helps in managing tasks efficiently and allows for better specialisation. When businesses grow larger, they need a system to handle their many activities, and departmental organisation serves this purpose well.
Departmental Organisation Meaning
Departmental organisation is the segmentation of a business into smaller units or departments. Various departments carry out different segments of work done by a company. For example, one can be concerned with sales and another with manufacturing. This organisational structure helps the organisations carry out their work efficiently and thus become effective.
Every department has a manager who defines when tasks have to be completed. These officials usually report to higher officers who clear this command chain. Departmental structuring helps the people working here to specialise in their work. Specialization this way improves the quality of work.
Types of Departmental Organisation
The departmental organisation comes in various types. Every type depends on how a firm wants to organise its activities. The major types of departmental organisation include functional, product-based, geographical, process-based, and customer-based departments.
Functional Departmental Organisation
This type of department is formed based on specific functions like finance, marketing, human resources, and production. Each function has experts who focus on their specialised tasks. This type of departmental organisation is common in many companies.
For instance, in a car manufacturing company, the marketing department deals with advertising, while the production department deals with assembling cars. The finance department deals with budgets and expenses.
Product-Based Departmental Organisation
Here, departments are formed according to various products or product lines. A different department deals with a specific product. This kind of organisation is beneficial for firms dealing with several products.
For example, an organisation manufacturing smartphones, laptops, and tablets can have individual departments for every product. The departments handle every aspect related to the respective product, right from its production to its sale.
Geographical Departmental Organisation
In this kind, departments are location-based. Companies with branches in various regions or countries apply for geographical departmental organisation. Each location has its departments. For instance, a multi-national company has different departments in the USA, Europe, and Asia. The regional department does the work particular to its region.
Process-Based Departmental
OrganisationThis type is focused on the production process. Different stages of the production process give rise to the departments. It is common in manufacturing industries.
For example, a textile company could have separate spinning, weaving, dyeing, and finishing departments. Each department deals with a specific stage of the process.
Customer-Based Departmental Organisation
In this type, departments are formed according to customer groups. Companies which serve different types of customers use this structure. For instance, a bank can have departments specialising in personal, corporate, and small business banking.
Features of Departmental Organisation
Departmental organisations have several features that make them efficient in the management of businesses. This kind of organization enhances efficiency, communication and productivity in firms.
Specialisation
One of the features of departmental organisation is specialisation. Each department focuses on one thing in this feature, enabling the employees to become experts in that field. This reduces the quality of work; hence, productivity is enhanced.
Clear Chain of Command
The departmental organisation creates a transparent chain of command. Each department has a manager who oversees the work and reports to higher officials. This structure helps in smooth communication and decision-making.
Accountability
Each department is responsible for its tasks and outcomes. Managers ensure that their departments meet goals and deadlines. This accountability helps improve performance and efficiency.
Better Coordination
Departments coordinate to achieve a company’s objectives. Proper organisation of departments also ensures coordination within different departments for better teamwork and collaboration.
Departmental Organization Examples
Most firms adopt departmental structure to carry out their affairs. Here are examples to show how this works in real firms.
Example 1: A Manufacturing Company
A car manufacturing company may comprise production, marketing, finance, and human resources departments. The production department could assemble the cars, the marketing department promotes them, the finance department manages budgets, and human resources take care of the employee-related tasks.
Example 2: Retail Chain
A large retail chain such as Walmart uses geographical departmental organisation. It has different departments for regions like the USA, Canada, and Mexico. Each regional department runs stores, sales, and customer service.
Example 3: Technology
CompanyA technology companies such as Apple adopt product-based departmental organisation. It has a different department for iPhones, iPads, and MacBooks. Each department designs, produces, and markets its product line.
Advantages of Departmental Organisation
Departmental organisation has several advantages that enable a business to work efficiently. The benefits make it a favourite among companies.
Improved Specialization
The departmental organisation allows employees to specialise in their fields. This improves the quality of work and increases efficiency. Experts in each department can concentrate on their work without distractions.
Flexibility and Growth
Companies allow departmental organisations to adapt to changes. Companies can add new departments or modify existing ones according to business needs. It helps businesses grow and be able to respond to changes in the market.
Efficient Decision-Making
With a transparent chain of command, decision-making becomes faster and more efficient. Managers can make decisions for their departments without waiting for approval from higher officials.
Disadvantages of Departmental Organisation
While departmental organisation offers many benefits, it also has some disadvantages. Sometimes, the departments overemphasise their work and do not communicate with other departments. This confuses other departments, leading to delays in producing certain projects.
Redundancy
Other departments may do similar work in a department. This leads to redundancy since there is duplication of efforts. It wastes resources and reduces efficiency.
Costly
Operating multiple departments may be costly. Each department must be staffed, resourced, and managed, thus increasing operational costs. They get too comfortable in their routines and resist changes, which makes it hard for the companies to put new strategies into place or respond to changes in the market.
Coordination
ChallengesWhile departmental organisation encourages coordination, it also throws several challenges. It is rather challenging to maintain effective communication and cooperation among the departments.
Departmental Organisation FAQs
1. What is the departmental organisation?
A departmental organisation organises a business by dividing it into departments based on specific functions or activities.
2. What are the types of departmental organisations?
The main types of departmental organisation include functional, product-based, geographical, process-based, and customer-based departments.
3. What are the features of departmental organisation?
Characteristics of departmental organisation include specialisation, transparent chain of command, accountability, flexibility, and coordination among departments.
4. What are the benefits of departmental organisation?
Benefits of departmental organisation include improved specialisation, better coordination, clear responsibilities, flexibility, growth, and efficient decision-making.
5. What are the drawbacks of departmental organisation?
Drawbacks include lack of communication, duplication of efforts, high costs, resistance to change, and coordination challenges.
