Departmentation, Contemporary Management Video Lecture | Contemporary Management - B Com

hello everyone thanks for watching and
opt our world videos I am neatly Saxena
and I am taking the subject principles
and practices of management this
particular video would be explaining you
what is the word departmentalization
what is the meaning of
departmentalization and what are the
different types of departments that can
be performed in an organization before
moving on let me just tell you that in
the previous videos of which were
related to module 4 we have covered what
is organizing and certain key points
lying to power span of control
departmentalization authority and
delegation of authority in this
particular video we would be
understanding departmentalization in
detail which leads to different types of
organization like matrix virtual and
multi-divisional so let me just explain
you first what is departmentalization
when we talk about an organization every
organization has lot of different works
that the people have to do there so
depending upon the work and depending
upon the different requirements of the
organization the entire organization is
subdivided into small groups small
working groups which work together to
achieve a common goal these groups are
called as departments so let me just go
through these the points a work group
brought together for performing certain
functions of similar nature so this is a
work group which are formed and in the
organization these people who are in the
group in one group they perform similar
kind of work departments of the various
parts or divisions of an enterprise it
is the process of division of enterprise
into different parts known as
departments it helps in simplifying the
task of top management for example if
there are ten different tasks which are
to be done in the organization so
related to every task there are
different groups which are formed so the
top management is able to keep a control
on the organization and the work gets
simplified because not everyone is doing
the same work it is the group's
different groups who are performing
different tasks so the control over
every group is easily then managed by
the top management so the advantages of
departmental
of course one specialization that every
department is specialized to do one
particular work so they become expert in
that work increases efficiency because
when some particular group is measure
lies in that work and they know very
well what they have to do then of course
the efficiency of the organization and
of that group increases it helps in
fixation of responsibility as I said if
there are ten different tasks which are
to be performed in an organization that
every group is given one task this task
when you give to a group is that
particular group becomes responsible to
finish that particular task so it helps
in fixation of responsibility helps an
appraisal because when you are keeping a
control and a close check on the group
you will be able to understand on the
top management would be able to
understand when to appraise and whom to
appraise it helps in training of
executives because then you do not have
to give training to an individual of
everything
it's just that what task or what group
does he belong to related to that
training is given for example if a
person is related to HR then only HR
training would be given to that person
if a person is related to marketing
training relating to the marketing
aspect would be given to that person and
of course control is something that we
have already discussed that it helps in
keeping a close control on the groups
and the top management is able to
monitor everything easily now these are
the different types of departments that
can be formed functional product process
customer geographical area project
matrix and network every organization
can have one or multiple kind of
departmentalization in the organization
let me just go through these
departmentalization one by one first let
me talk about the functional structure
it is very very simple there are
different functions which are to be
performed in an organization HR
marketing Sales Account finance
operations production so depending upon
every function one department is formed
HR department marketing department sales
department Accounts Department
operations department so let me just go
through the bullet points in a
functional structure activities are
grouped and departments are created on
the basis of specified func
to be performed it is useful my
specialization is required in the
performance of various functions like
production finance marketing etc second
is product or divisional structure at
times what happens is that a
organization land of producing different
products for example let's say if it is
in the FMCG industry it might be
producing let's say toothpaste at the
same time it must be producing medicines
also so now you have multiple range of
products so depending upon the range of
products you divide the organization
medicine division took face division may
be biscuit division or whatever so such
type of structure is adopted by
organizations having multiple product
lines each major product or product line
is organized as a separate division it
is appropriate when each product is
relatively complex so what happens is
that every department like for example
when I told you about the medicine
department now this medicine department
would further have some departments like
accounts HR marketing etc the let's say
the biscuit a partner would again have
these different sub departments so if
you can see in this particular diagram a
bombardier limited is a company which
has three different divisions mass
transit sector recreation and utility
vehicle and rail product sector so these
are the three different products which
the company is producing and depending
upon the products the company has
divided the entire organization into
three verticals and then further you can
see that it has further different
subdivisions in every vertical so this
is called as the product or the
divisional structure again this is
another example high ends is a company
which is into FMCG they produce this
food service division they have an
infant food division they have
condiments division and then of course
they have start case to run division pet
food frozen foods miscellaneous product
division so depending upon the different
types of food that they are producing
they have departmentalized their
organization third is processed
departmentalization now act actually at
times what happens is that in case of
the product that you are producing is
very very complex that means the
production of
particular product is very very complex
and very very tedious then depending
upon the different stages through which
the product goes the entire organization
is divided into different sub divisions
or departments let me give you an
example of let's same car when our
company is producing car then it goes
through multiple phases you have to get
different parts of the cars maybe you
are manufacturing it yourself or maybe
you've outsourced trade so you're
purchasing that product and then the
entire car goes to through different
stages of production so depending upon
the stages of production the entire
organization is divided into sub
departments or departments let me just
if we go through this particular diagram
see the first department is sewing
Department manager then you are planning
and milling Department then you are
assembling department lac whirring and
sanding department finishing Department
and inspection and shipping department
so one product is going through this
multiple stages so but the way the
product is going through multiple stages
then these according to the stages every
stage has one department if we go
through the bullet points it is more
efficient flow of work activities can
only be used with certain type of
products why certain type of runner
because if the products needs or goes
through multiple stages while production
then of course process
departmentalization is very beneficial
then comes customer departmentalization
at times it happens that the company is
producing one product but then they are
dealing with multiple customers they
might be dealing with the wholesalers
they might be dealing with the retailers
they might be dealing with the
government the curves they might be
dealing with the corporates so depending
upon the different customers the entire
organization is divided into different
departments that is called as a customer
departmentalization if I give you an
example when we talk about service
industry maybe a company is producing
services providing services to the
government it is providing services to
corporate it is providing services to
individuals also so then the entire
organization can be divided into the
government division corporate division
individual division so let me just go
through the bullet points
followed an enterprise's engaged in
providing specialized services to
different classes of customers customers
are the guide for grouping the
activities so director sales it has
three divisions manager retail accounts
wholesale accounts and government
accounts then comes geographical
division menu on geographical
departmentalization when the
organization is spread worldwide or you
know maybe like when we talk about India
so then India is huge so maybe then you
know you can divide the organization is
two Weston a division Eastern Division
certain division nothing division when
we talk about the world maybe you know
if the company is spread in different
continents or continents wise you can
divide maybe European division Asian
American so every division or every
department would be dealing with that
particular region it is followed in case
of service organizations which have
offices in different regions on
geographical areas see if you look into
this particular diagram you have retail
division a bee and international
division international division further
deals with Latin America Europe and Asia
so if the entire organization is spread
into a lot of four different
geographical areas then you get her jaw
graphical departmentalization this is
very interesting which is called as
project departmentalization these days
lot of companies are outsourcing their
tasks to different organizations so
these organization which are you know
may be like working as a consultants or
maybe are kpo or any such organization
which takes up multiple projects from
different organizations so then they
have multiple projects so depending
about the project's the entire
organization can be divided into project
departmentalization if a company is
taking projects which deal with
different industries so then depending
upon the different type of projects the
entire organization can be divided into
project departmentalization if we read
the first bullet a project may be
defined as a complex set of activities
which are diverse specialized and
technical to be performed within the
given time frame and cause structure for
example if you talk about HCL IBM these
are certain company
which takes up projects from the
government from international
organizations also so depending upon the
kind of projects and they are taking
they divide the organization's into
project departments the project staff is
separate from and independent of the
functional departments so a company
might have function departments also at
the same time they have project
departments also project departments
deals on these project teams they deal
only with specific project and they are
not related to the functional
departmentalization they are independent
of that I hope this point is clear to
you function departmentalization is HR
department accounts when I was marketing
department etc at the same time the
company can have project
departmentalization also lying IT
projects finance projects maybe HR
projects so when these people are
dealing with these projects they are
only dealing with the projects are not
reporting to the respective departments
this would be for a company that does
projects as a main part of the business
most resources are involved in project
work since the project lead has the team
reporting to him/her he/she has a lot of
authority at the end of the project the
team members are reassigned so every
project team has a project leader and
then this project leader is responsible
for getting that particular project
accomplished see here you can see you
have different project managers John
Jane's you and then you have every
project leader has some people working
under them matrix is a wonderful way of
departmental eyes in your organization
in this it is a mixture of functional
and project departmentalization that
means the company has a I will show you
the slide first here the company has a
functional departmentalization but at
the same time the company has project
departmentalization also so when a
company has this project
departmentalization they pick up people
from different functions like purchase
production R&D marketing finance they
might make one people each from these
different departments and form project a
similarly project B again might have
people from purchase production are in
democratic finance and they form project
B project C might again take one
individual or two individual from each
department
it's now these individuals which are
coming from different departments and
are working together under one project
would be reporting to the project
manager as well as to their respective
functional heads once the project is
completed these people again go back to
their functional departments so this is
basically that as and when you are
getting certain projects and you need
people from different departments you
pick up people from different
departments you form a project team when
this project team is formed these people
who come from different departments
would be working for that particular
project and would be reporting to the
project head and also to the functional
head once the project is accomplished
these people go back to their respective
departments so that is the reason it is
called as a matrix structure where in a
grid or a matrix is formed and these
people are reporting to both the both
project and functional heads now let's
read the bullet points it is also called
as a grid organization it is a hybrid
structure combining functional and
project structure it is a highly
flexible form that is readily adaptable
to changing circumstances matrix
structure rely heavily on committee and
team authority some companies use the
matrix organization as a temporary
measure to complete a specific project
the end of the project usually means the
end of the matrix because when the
project ends these people go back to
their functional departments and there
is no more matrix next is network or
virtual organization these days what is
happening as I told you that many
organizations are outsourcing their
tasks to the other organizations because
they think that they do not want to put
in money for this particular task or
maybe they do not have expertise for
this particular task
so they find out an organization which
has expertise in that toss and then they
outsource that particular task to the
company so now in in such a situation
the organization becomes a network or
virtual organization people are not
working in the in under one roof maybe
you are giving tasks to people who are
working from home so the organization
doesn't actually is practically it
doesn't exist but it exists virtually so
it is let me just read the first bullet
it is a flexible usually temporary set
of alliances among disparate companies
that have come together for a specific
single purpose it allows organizations
to focus on that which they do best that
is their core
written so if there are five companies
and they have a common goal every
company would be doing their own task
which is related to their competency
areas and this way organizations can
discontinue activities not part of its
core and may outsource us functions one
from the other firms see now one
organization which is which says that ok
we are good at finance operations and
management so we keep these things with
ourselves the finance operation and
management of my company would be
handled by my company only but I
outsource the accounting and human
resource to contracted administrative
services
I also out distribution and logistics I
also outsource my sales in marketing I
also outsource manufacturing in
contracted manufacturing in Asia what
tasks am i doing myself my finance
operations and management were the other
tasks or the functions of my department
of my organization I have outsourced to
the different companies so then this
structure becomes a network or a virtual
organization we just take to the slide
where and we had discussed that what are
the different types of
departmentalization I hope it is clear
functional is the categorizing the or
departmental izing the organization
depending upon the different functions
like HR marketing product depending upon
the different product that you have you
divide the entire company into different
products process if the company is
producing a particular product which
goes through multiple stages so
depending upon the entire stages of the
process you divide the definition into
different departments different types of
customers are coming to you so you
divide the entire organization based on
the customers you have geographical area
if the company is spread into a store
offical area so you divide the entire
organization on the basis of the area or
on the basis of the geographical area
the company's taken multiple projects
then the company is divided into
different departments based on the
project's matrix is a combination of
functional and project wherein people
working together under one project team
are reporting both to the project head
and the functional head network is when
the company is not doing all the things
by themselves but are outsourcing their
functions to different companies then
this structure becomes a
Network organization I hope with this
summary you were able to understand the
concepts of departmentalization thank
you so much for watching this particular
video