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Advantages of Departmentation

Following are the advantages of departmentation:

(i)                 Advantage of managerial specialization

Departmentation enables enterprises to avail of the advantages of managerial specialisation. Infact, in whatever way are departments created; it is sure that each departmental head is a specialist in matters pertaining to his department. This specialisation means increased efficiency of operations, leading to more profits for the enterprise.

(ii)               Expansion and growth of enterprise facilitated

The device of departmentation facilitates growth and expansion of the enterprise. Depending on growth requirements of business, more departments may be created in the enterprise; or within the same department, more sub-departments may be created – to handle additional work load.

(iii)             Decentralization facilitated

Departmentation facilitates the implementation of the policy of decentralization of authority. In fact, many departmental heads may be granted full powers to run their departments efficiently – through systematic decentralization. Decentralization is likely to motivate departmental heads and boost their morale-all leading to higher efficiency and increased profits for the whole organisation.

(iv)             Fixation of responsibility facilitated

Departmentation facilitates fixation of responsibility on departmental heads, as their roles and functions are clearly specified. Management, accordingly, can also install a system of ‘Responsibility Accounting’; and ensure its advantages to the organisation.

(v)               Performance appraisal and managerial development

On the basis at the functioning of departments, it is easier for management to undertake performance appraisal of departmental heads and their subordinates. Performance appraisal findings may provide useful clues to initiating schemes of managerial development.

(vi)             Facilitates intra-departmental co-ordination

Since people in a department perform interrelated jobs and tasks pertaining to the subject matter of that department; therefore, it could be said that departmentation facilitates intra-departmental co-ordination. Moreover, people in the department develop better social informal relations because of frequent interactions.

(vii)           Administrative control facilitated

Departmentation facilitates administrative control on the part of top management. In view of the nature and functioning of departments; top management can devise and implement broad but suitable controls over departmental heads.