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Departmentation by process or activity

Departmentation by process or activity

Departmentation by the process may be suitable for companies where production operationsflow in a sequence from one stage to another. For instance, in an oil company, various processes involved in the sequence from one stage to another. There is a distinctive sequence in these operations so that finished product of one department is the basic raw material for the department next in the sequential order.

Advantages:

1.       Process Departmentation facilitates coordination by grouping production facilities needed for the completion of each distinct phase in the flow of work.

2.       It provides for more effective utilization of specializes equipment and special skills.

3.       It puts full responsibility for the completion of each stage in the production process on the head of process department.

4.       This type of Departmentation is simple and widely used.        

    Disadvantages:

1.       It makes coordination more difficult. A breakdown in one process department may hinder the working of all the other process departments. Which follow the former in sequential work flow?

2.       It causes too much focusing of vision of departments personnel on their own department with the result that it may create conflict among the various departments.

3.       Profit responsibility cannot be assigned to process departments.

4.       It may cause duplication of general purpose equipment, and unless the size of the various process departments justifies its efficient utilization, it may result in wastage and inefficiency. 

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