definition of Wikipedia
Departmentalization refers to the process of grouping activities into departments.
Owing to the complexity of tasks and the competitive environment in which organisations operate, they often use a combination of the above-mentioned methods in departmentalization.
As March and Simon (1958) noted when tracing a first approach to departmentalization back to Aristotle (Politics, Book IV, Chap. 15), the problem of distributing work, authority and responsibility throughout an organization is hardly new. In modern times, Gulick and Urwick (1937) were the first to introduce a theory of different departmentalization strategies, which were referred to as departmentalization by purpose and departmentalization by process.
”First [organization by major process] ... by bringing together in a single office a large amount of each kind of work (technologically measured), makes it possible in the most effective divisions of work and specialization. Second, it makes possible also the economies of the maximum use of labor saving machinery and mass production.
... there is danger that an organization erected on the basis of purpose will fail to make use of the most up-to-date technical devices and specialists because ... there may not be enough work of a given technical sort to permit efficient subdivision.
Is there any advantage in placing specialized services like private secretaries or filing in [process departments]? In a very small organization, yes; in a large organization, no. In a small organization, where there is not a full-time job on some days for a secretary, it is better to have a central secretarial pool than to have a private secretary for each man. In a large organization, the reverse is true.” (Gulick & Urwick, 1937)
Studying the above characterizations of the two forms of departmentalization we note that purpose decentralization is concerned with building work around specific products, customers, or geographic locations, while process departmentalization encompasses the efficiency of ”production”. March and Simon (1958) described the basic difference between the two ways of departmentalization as following:
”Process departmentalization generally takes greater advantage of the potentialities for economy of specialization than does purpose departmentalization: purpose departmentalization leads to greater self-containment and lower coordination costs than process departmentalization.”
|Author's note: Please keep in mind that the content of the term "process" as it is used today in concepts such as Business Process Management or Business Process Reengineering differs significantly from its use by Gulick and Urwick. While G. and U. refer to functional decomposition when using the term "departmentalization by process", process orientation in today's meaning is more comparable to what G. and U. refer to as "purpose departmentalization".|
When taking a closer look at the three ways of departmentalization by purpose–product, customer, and location–we note that there are some specific advantages related to it.
First, self-containment tends to improve the ability for internal coordination within the unit. At the same time, the need for developing and maintaining extensive external coordination mechanisms is reduced.
Second, a clearer focus on the purpose itself–serving a specific customer or market–is enabled. On the other hand, the sense of independence may result in a drift-off from the achievement of the overall objectives of the organization. Therefore, several authors have emphasized the need for establishing control systems that serve the purpose of allowing decentralized decisions, while still aligning all sub-units to the overall goals of the organization (Drucker 1954, Koontz & O’Donnell, 1964).
Departmentalization by process, on the other hand, seeks to benefit from the advantages that are found in high specialization, and tends to be very efficient in some instances. A high degree of specialization leads to the development of proficiency and professional competence, as well as it enables, and implies, the development of centralized control functions.
On the other hand, the problem of aligning individual and organizational goals remains. In addition, in this case, we would also need to consider departmental goals. Also, the high level of specialization is a barrier for the flexible reallocation of resources within the organization, i.e. people can not perform other tasks than those they are working with in their functional occupation. The most common way of process departmentalization is the division of the firm into business functions, such as purchasing, manufacturing, sales, accounting, etc.
Looking at the circumstances encompassing the use of either of the departmentalization strategies, we find that departmentalization by process generally is advantageous in cases of stable environments, while departmentalization by purpose, featuring self-containment and certain amounts of independence, appears to be the appropriate strategy for handling changing or unpredictable circumstances. Alfred Chandler (in: March and Simon, 1958) identified a correlation between the application of purpose departmentalization and the use of a diversification strategy:
”The dominant centralized structure had one basic weakness. A very few men were still entrusted with a great number of complex decisions. ... As long as an enterprise belonged in an industry whose market, sources of raw materials, and production processes remained relatively unchanged, few entrepreneurial decisions have to be reached. In that situation, such a weakness was not critical, but where technology, market, and sources of supplies were changed rapidly, the defect of such a structure became more obvious.”
Dictionary and translator for handheld
New : sensagent is now available on your handheld
A windows (pop-into) of information (full-content of Sensagent) triggered by double-clicking any word on your webpage. Give contextual explanation and translation from your sites !
With a SensagentBox, visitors to your site can access reliable information on over 5 million pages provided by Sensagent.com. Choose the design that fits your site.
Improve your site content
Add new content to your site from Sensagent by XML.
Crawl products or adds
Get XML access to reach the best products.
Index images and define metadata
Get XML access to fix the meaning of your metadata.
Please, email us to describe your idea.
Lettris is a curious tetris-clone game where all the bricks have the same square shape but different content. Each square carries a letter. To make squares disappear and save space for other squares you have to assemble English words (left, right, up, down) from the falling squares.
Boggle gives you 3 minutes to find as many words (3 letters or more) as you can in a grid of 16 letters. You can also try the grid of 16 letters. Letters must be adjacent and longer words score better. See if you can get into the grid Hall of Fame !
Change the target language to find translations.
Tips: browse the semantic fields (see From ideas to words) in two languages to learn more.