What are Advantages of Departmentalization?

What are Advantages of Departmentalization?

The advantages of departmentalization are depicted in the image below.

The main benefits or advantages of departmentalization are listed as follows:

1. Specialization.
2. Growth and expansion.
3. Fixing responsibility.
4. Better customer service.
5. Performance appraisal.
6. Management development.
7. Optimum utilization of resources
8. Facilitates better control.

Now let's discuss briefly each advantage of departmentalization.

1. Specialization

In departmentalization, each department performs a different function. For example, Finance department looks after finance, Marketing department looks after sales, etc. This results in specialization. Specialization leads to speed, accuracy, efficiency and improvement in quality and quantity of work.

2. Growth and expansion

There are many different departments in the organization. Therefore, the organization can easily grow and expand. Without departmentalization, the organisation cannot grow and expand. It will remain small and static.

3. Fixing responsibility

Departmentalization helps to fix the responsibility of a specific job on a particular department. If there is a mistake in the accounts, then the accounts department will be held responsible. Similarly, if there is a mistake in the production, the production department will be held liable, and so on.

4. Better customer service

Departmentalization results in a better customer service. The customers get quick and efficient service. Many organizations do Geographic Departmentalization and Customer Departmentalization.

5. Performance appraisal

In departmentalization, a specific job is given to a particular person or department. Therefore, it is very easy to do the performance appraisals. That is, the performance of a person or department can be easily measured.

6. Management development

Training given to managers is called management development. Departmentalization facilitates management development. This is because the junior or trainee managers can be sent to different departments to get an On-the-Job-training. They are allowed to take part in planning, decision making, implementation of strategies, etc. This results in management development.

7. Optimum utilization of resources

Departmentalization facilitates optimum utilization of resources. The men, money, materials, machines, methods and markets are put to maximum use. There are many organizations that use Time Departmentalization. Here, there are working shifts like morning shift, evening shift, night shift, etc. This results in optimum utilization of resources.

8. Facilitates better control

In departmentalization, the organization is divided into small manageable departments. These departments can be easily supervised and controlled. Hence, departmentalization also facilitates a better control.