Approaches to Departmentation
Whereas major departments of an organization are established by top-level managers,
supervisors primarily are concerned with activities within their own areas. Nevertheless,
from time to time supervisors will be confronted with the need to departmentalize within
their areas, and they should be familiar with the alternatives available for grouping
activities. These are the same options available to top-level managers when they define
the major departments. Departmentation is usually done according to function, products
or services, territory, customer, process and equipment, time, or matrix design.
Functional Departmentation
The most widely used form of departmentation is to group activities by function—the
jobs to be done. Consistent with the idea of specialization and division of work, activities
that are alike or similar are placed together in one department and under a single chain of
command. For example, word processing, data-entry, and duplicating services may be
grouped together into a clerical department or information processing center; sales and
promotional activities into a marketing department; manufacturing assembly work into a
production department; inspection and monitoring activities into a quality control
department; and so on. As an enterprise undertakes additional activities, these new
activities—for the most part—are simply added to the already existing departments.
Functional departmentation is a method that has been and still is successful in
most organizations. It makes sense since it is a natural and logical way of arranging
activities. Grouping departments along functional lines takes advantage of occupational
specialization by placing together jobs and tasks that are performed by people with the
same kinds of training, experience, equipment, and facilities. Each supervisor is
responsible primarily for an area of operation upon which his or her energy and expertise
can be concentrated. Functional departmentation also facilitates coordination since a
supervisor is in charge of one major area of activity. It is easier to achieve coordination
this way than to have the same functions performed in different departments under
different supervisors.
In recent years, many companies have utilized extensive cross-training and multiskilling of employees in order to develop more flexibility in operations. A flexible
workforce is one that has employees trained to handle a variety of skills needed to
perform multiple tasks in production, customer-service departments, or processes. This is
in contrast to the more traditional functional arrangement where each worker is
responsible for only one job, or where each worker performs narrowly defined tasks in
the operation. Although developing a flexible workforce can be costly and time
consuming, the advantages can be well worth the effort. Supervisors can more easily
delegate work to employees who better understand the total departmental functions, and
the employees also can assume additional responsibilities and tasks in a more
collaborative fashion aimed at getting the departmental work done.
Product or Service Departmentation
Many companies utilize product or service departmentation. To departmentalize on a
product basis means to establish each major product (or group of closely related
products) in a product line as a relatively independent unit within the overall framework
of the enterprise. For example, a food products company may choose to divide its
operations into a frozen food department, a dairy products department, a produce
department, and the like. Product departmentation can also be a useful guide for grouping
activities in service businesses. For example, most banks have separate departments for
commercial loans, installment loans, savings accounts, and checking accounts. Many
home maintenance firms have separate departments for carpentry, heating, and airconditioning services.
Geographic (Territorial, Locational) Departmentation
Another way to departmentalize is by geographical considerations. This approach to
departmentation is important for organizations with physically dispersed activities.
Large-scale enterprises often have divisions by territories, provinces, and cities.
Increasingly, many companies also have international divisions. Where units of an
organization are physically dispersed or where functions are to be performed in different
locations—even different buildings—geographic departmentation may be desirable.
Locational considerations may be significant even if all activities are performed in one
building but on different floors. An advantage of territorial departmentation is that
decision-making authority can be placed close to where the work is being done.
Customer Departmentation
Many organizations find it advisable to group activities based on customer
considerations. The paramount concern here is to service the differing needs and
characteristics of different customers. For example, a university that offers evening
programs in addition to day programs attempts to comply with the requests and special
needs of part-time and full-time students. Companies may have special departments to
handle the particular requirements of wholesale and retail customers. Major department
stores may attempt to reach different segments of the buying public, such as customers
for a “bargain basement” or lower-priced division at the one extreme and an exclusive
high-priced fashion division at the other extreme. Most hospitals have separate units for
outpatient services.
The importance of maintaining close customer relationships in today’s
competitive climate is well recognized by most organizations. Supervisors often are the
key representatives in the effort to build strong interpersonal relationships with
customers. Coordinated efforts to communicate and build trust with customers has been
referred to as customer relationship management (CRM). This type of effort may be
spearheaded by the marketing/sales department, but supervisors from other departments
with customer linkages are usually expected to be part of whatever processes are
appropriate and helpful to build customer goodwill and loyalty.
Process and Equipment Departmentation
Activities also can be grouped according to the process involved or equipment used.
Since a certain amount of training and expertise are required to handle complicated
processes and operate complex equipment, activities that involve the use of specialized
equipment may be grouped into a separate department. This form of departmentation
often is similar to functional departmentation. For example, in a machine shop
department, specialized equipment is used but only certain functions are performed;
function and equipment become closely allied. A data processing department utilizing a
mainframe computer may serve the processing requirements of a number of operations
and departmental needs throughout an organization.
Time Departmentation
Another way to departmentalize is to group activities according to the period of time
during which work is performed. Many organizations are engaged in round-the-clock
operations and departmentalize on the basis of time by having work shifts. Activities are
departmentalized by time (day, afternoon, night shift), although the work operations of all
the shifts for the most part may be the same. Here, too, there may be an overlap in the
departmentation process. Where time is a partial basis for departmentation, it is likely
that other factors will be involved. For example, a maintenance division—based on
function and services—may be further departmentalized by shifts, such as the
maintenance night shift. Shift departmentation can create organizational questions of how
self-contained each shift should be and what relationships should exist between regular
day-shift supervisors and the off-shift supervisors.
Shift work also can contribute to numerous other employee problems and
concerns, including personal safety, sleep deprivation, childcare, and work/family
conflicts. Night-shift workers often perceive that they are viewed as “second-class
citizens” who have limited access to the training and development opportunities afforded
to day-shift personnel. Supervisors of all shifts need to be cognizant of and sensitive to
these types of shift workers’ concerns. It may be possible for supervisors to coordinate
certain types of scheduling rotation, training opportunities, and other efforts (perhaps
with the assistance of the human resources department) designed to raise and maintain
shift worker morale and job performance to acceptable levels.
Mixed Departmentation
In order to achieve an effective structure, a supervisor may have to apply several types of
departmentation at the same time. This is referred to as “mixed” departmentation. For
example, there may be an inventory control clerk (functional) on the third floor
(geographic) during the night shift (time). In practice, many organizations have a
composite departmental structure involving functional departmentation, geographic
departmentation, and other forms. All of these alternatives may be available to
supervisors to facilitate the grouping of activities in their departments.
There are some departments in which additional subgroupings are not needed.
However, supervisors of departments of considerable size may find it necessary to divide
various jobs and skills into different groups under a lead person or foreman, who in turn
will report to the supervisor. Whatever structure is chosen, the purpose of
departmentation is not to have a beautiful, well-drawn organization chart. The purpose is
to have a sound structure that will best achieve the objectives of the department and the
entire organization.