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Ideal Principles of Departmentation

Some of the ideal principles of departmentation are suggested below:

(i)                 Principle of attainment of enterprise objectives

According to this principle, the basis of departmentation must be such that there is greatest facility, in the most effective and efficient attainment of enterprise objectives.

(ii)               Principle of comprehensive departmentation

By the principle of comprehensive departmentation, we mean that the entire organisational functioning is covered by the chosen basis of depanmentation i.e. no aspect of organisational functioning is overlooked, in creating departments, in the organisation.

(iii)             Principle of inter-departmental co-operation

Departmentation must be so done in an organisation, that there is maximum inter-departmental co-operation; and that the possibilities of interdepartmental conflicts are minimized.

(iv)             Principle of promotion of specialization

The process of department creation must promote both managerial and operational specialisation so that maximum organisational efficiency is achieved; as a result of such specialisation.

(v)               Principle of cost-benefit analysis

The notion of ‘cost-benefit analysis’ must be kept in mind, by management; while creating departments, in the organisation. According to this principle, the benefits obtained from creation of departments must exceed their operational costs; otherwise organisational profitability will be reduced.

(vi)             Principle of top-management control

According to this principle, the basis of departmentation must facilitate topmanagement’s overall control over all departments.

A derivative principle here is that departmentation basis must ensure exact fixation of responsibility on departmental heads vis-a-vis the performance of their departments. Then only, is it possible for top-management to exercise control over departmental performances.

(vii)           Principle of special attention to Key-Result Areas (KRA)

Departments must be created on such a basis, in an organisation; that special attention is paid to key-result areas (KRA), during departmental performance. KRA are those which vitally affect the long-term survival and growth of an enterprise. KRA may include profitability, market standing, public relations etc. as determined by the top management.

(viii)         Principle of best utilization of resources

According to this principle, departmentation must be so done in an organisation; that there is ensured a best utilization of precious organisational resources like raw materials, manpower, machinery, technology and other inputs. There must not be any duplication of efforts or wastage of resources, by the departments created in the organisation.

(ix)             Principle of autonomous feeling to departmental heads

According to this principle, the basis of departmentation must be such that departmental heads have the feeling of maximum autonomy in their operational life; so that they function with creativity and innovative considerations in mind. Such autonomy will motivate them to work according to the best of their abilities and competence.

(x)               Principle of flexibility

The basis of departmentation must lead to the emergence of a flexible depmtmental set-up; so that in view of volatile and turbulent external environmental influences, more departments (or sub-departments) may be added to the existing set-up or some departments (or sub-departments) deleted from the existing set-up.

(xi)             Principle of human consideration

The ideal basis of departmentation must not only rest on technical or financial considerations; it must give due weightage to human considerations i.e., needs, values, attitudes, expectations, feelings etc. of people working in the organisation. Then only will departments created in the organisation lead to maximum organizational efficiency and maximum human satisfaction.