Departmentalization

Departmentalization refers to the process of grouping activities into departments.

Division of labour creates specialists who need coordination. This coordination is facilitated by grouping specialists together in departments.

Division of labour or specialization is the specialization of cooperative labour in specific, circumscribed tasks and roles, intended to increase the productivity of labour. Historically the growth of a more and more complex division of labour is closely associated with the growth of total output and trade, the rise of capitalism, and of the complexity of industrialization processes. Later, the division of labour reached the level of a scientifically-based management practice with the time and motion studies associated with Taylorism.

Coordination is the act of coordinating, making different people or things work together for a goal or effect.

After reviewing the plans, usually the first step in the organizing process is departmentalization. Once jobs have been classified through work specialization, they are grouped so those common tasks can be coordinated. Departmentalization is the basis on which work or individuals are grouped into manageable units. There are five traditional methods for grouping work activities:

1. Departmentalization by function

2. Departmentalization by product

3. Departmentalization by geographical regions

4. Departmentalization by process

5. Departmentalization by customer