Departmentation is a part of the organizational process. It means dividing and grouping the activities and employees of an enterprise into various departments, division of the total work of an enterprise into individual functions and sub functions. Then, entire on the basis of similarly of work, or efficiency in their performance, these functions and sub functions are grouped together so as to constitute different work, units. The work units so formed may be called departments, divisions or units.

Need or importance of Departmentation

The basic need for Departmentation arises because of specialization of work and the limitation on the number of subordinates that can be directly controlled by a superior. Therefore, if there is no Departmentation, there would be serious limitation on the size of the organization. Grouping of activities and consequently of the personnel into departments makes it possible to expand an organization to any extent. However, when the departments are created to overcome this basic limitation, they serve a number of other functions leading towards the organizational efficiency. The major importance of the Departmentation is along to the following lines. 

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