Management Process and Organization Behaviour

Q3 Describe Maslow’s Need Hierarchy theory

Abraham Maslow offers a general theory of motivation called ‘need hierarchy theory’.
The features of this theory are as follows:
1. People have a wide range of needs which motivate them to strive for fulfillment.
2. Human needs can be definitely categorized into five types:
Physical needs
- Safety or security needs.
- Affiliation or social needs,
- Esteem needs and
- Self-actualisation needs.
3. These needs can be arranged into a hierarchy. Physical needs are at the base whereas self-actualisation needs are at the apex.
4. People gratify their physical needs first, when the need is satisfied, they feel the urge for the next higher level need.
5. Relative satisfaction of lower level need is necessary to activate the next higher level need.





















Maslow’s Need Hierarchy theory of Motivation
Motivational Techniques
Monetary incentives – like cash emoluments, fringe benefits, security or tenure etc.
Job-based techniques – To satisfy the social and psychological requirements of the jobholder like job-simplification, job-rotation, job-enlargement and job-enrichment.
MBO Technique – According to it both men and boss participate and determine each individual’s area of responsibility.
LeaderShip Techniques – Autocratic, democratic and participative – supportive style of leadership have implications for employee-motivation.
Sensitivity Training – It is training techniques given to groups of managers themselves so that they may behave with and motivate their subordinates better.

Q4 Discuss the important similarities and differences among individuals.

Every person is unique; no one else has the same body, no one else has the same learning experience. But there are some similarities in individuals. The major similarities among individuals are as follows:

- Intelligence: Almost all human beings have intelligence. Difference is a matter of degree only. People can determine cause and effect relationships, make generalization form insights and experiences. Almost all individuals apply intelligence to adapt to wide range of environmental conditions – such as climate, weather, new atmosphere etc.
- Self-Relexiveness: People not only know so much, but they are also aware of their knowledge. It gives people the power of making choices. They can set goals and objectives and also can determine how they can reach the preset targets.
- Communication through language: Another interesting similarity of people is communication. Communication is one of the major building blocks of organization. Human beings have by far the most effective audio and written languages. Though people make use of different languages, the purpose of all languages is to communicate.
- Tool Making: Human beings have inherent innovative abilities. They have the power to make tools. They innovate new systems to increase productivity and to maintain the complex exchange process in modern society.
- Social Relations: People have family structure, social relations; they can bind and plan time. Many people try to understand their very existence through religion. People generally do not wait until random events produce what they want.
- Carry forward gains: Almost all people have the ability to carry forward the accumulated gains. This is how the whole fabric of civilization is passed into new ones. Libraries are eloquent testimony of this ability.
Difference among individuals
- People differ in the importance they attach to intrinsic rewards:
People with different psychological make-ups do indeed respond differently to challenging versus routine jobs. Some people prefer challenging jobs that afford scope for expression of higher level and skilled abilities. Therefore, people who work in organizations attach different degrees of importance to rewards for performance and the kind of job they would like to perform.
- People differ in the style of supervision: Some people welcome opportunities for providing necessary input into important decisions and like to be their own boss to the maximum extent. Some individuals, on the other hand, may like to extend a helpful guiding hand to others; if they are loaded with work.
- People differ in the type of compensation plan they want: Some people in the organizations prefer a straight salary system. While, some other type of people respond enthusiastically to wage incentive scheme based on piece-rate or quality of work etc.
- People differ in their tolerance for stress: Some people cannot bear stress for long. While some people possess resistance power to tolerate the stress for longer periods.
- People differ in their preferred schedules of work: No two individuals are alike with
respect to their preferred schedule of work.
Q5 Make a comparative study of formal and informal groups.
While working in an organization, the employees develop two types of groups. These groups are-
1- Formal Group
2- Informal Group
Formal Group – Formal groups share business objectives. They are together to satisfy the professional needs. They share a formal communication. This communiation flows in formally established channels and is concerned with work-related matters. All orders, instructions and decisions in this group are communicated to the subordinates through this channel. Formal communication flows in three directions. Downward, upward and laterally between departments.

Download Communication: Communication that flows from superiors to the subordinates is known as downward communication. E.g. job instructions, policy statements, procedures and company publications.

Upward Communication: Communication that flows from the subordinates to superiors is called upward communication. These communications generally act as a feedback. E.g.: Grievances, suggestions etc.

Horizontal or Lateral Communication: These are also known as lateral or cross-wise communications. They refer to communications among the subordinates who are working on the same level of the organization. Such communications help co-ordinate the activities of different departments.

Forms of Communication in formal group-
1- Verbal or oral communication
2- Written Communication
3- Non-verbal Communication
Informal Group – Informal group share informal relationship between the parties. They share a informal form of communication among each other. Informal communication is free from all sorts of formalities. They are generally termed ‘the grape-vine’. Informal communication may be conveyed by a simple glance, gesture, nod, smile or mere silence.

Q6 Write note on major determinants of personality.

Human behaviour, a complex phenomenon as it is, is most difficult to define in absolute terms. It is primary a combination of responses to external and internal stimuli. These responses would reflect psychological structure of the person and may be a result of a combination of biological and psychological processes. It is a system by which a human being senses external events and influence, interprets them, responds to them in an appropriate manner and leans from the result of these responses.

Several factors influence the shaping of our personality. Chief among these are:
1- Heredity: It has been established that certain characteristic of behaviour are genetic in nature and a human being inherits a certain degree of similarity to other individuals, as well as uniqueness in the form of genes and chromosomes. Some of the characteristics such as physical traits including physical height, slimness, dexterity, intellectual capacity and the ability to learn and logicalize are all inherited and have a wide impact on behavioural patterns. How we learn to handle other’s reactions to us (e.g.: our appearance) and inherited traits can also influence how our personality is shaped.
2- Family Background: The socio-economic status of the family background and education of the parents and extended members of the family such as uncles and aunts, grandmother etc., influence the shaping of personality to a considerable extent. Members in the family mould the character of all children, almost from birth, in several ways – by expressing and expecting their children to conform to their own values, through role modeling and through various reinforcement strategies such as rewards and punishments which are judiciously dispensed.

3- People we interact with: A person is known by the company he keeps”, is a common adage. The implication is that people influence each other and tend to associate with members who are more like them in their attitudes and values. The influence of various individuals and groups shapes our personality. Our desire to be a part of the group and belong to it as its member will compel many of us to change certain aspects of our personality. Thus, our personality becomes shaped throughout our life by at least some of the people and groups we interact with.
4- Culture: The cultural values we are surrounded by significantly tend to shape our personal values and predispositions. Such differences are mainly due to the fact that cultural norms and expectations of what appropriate and acceptable behaviours ought to be tend to vary across societies and cultures.

Q7 Give a brief account of non-financial individual incentives.

Individual incentive is generally based on reward. A postive motivation involves the possibility of increased motive satisfaction. According to Flippo – “Positive motivation is a process of attempting to influence others to do your will through the possibility of gain or reward”. Incentive motivation is the “pull” mechanism. The receipt of awards due recognition and praise for work-well done definitely lead to good team spirit, co-operation and a feeling of happiness.

Positive Motivation include:
• Financial Incentives
• Non Financial Incentives

Financial Incentives includes-
• Praise and credit for work done.
• Wages and Salaries

Non-financial Incentives includes-
• Appreciation
• A Sincere interest in subordinates as individuals
• Delegation of authority and responsibility.

Q8 State the factors affecting span of control.

Controlling means to guide something or somebody in the direction it is intended to go. A manager is responsible for controlling the work for which he is accountable. Unless the management is able to fix in clear and unambiguous terms the objectives of the organization and can chart out a clear and realistic course of action for their attainment, effective control is almost impossible. The process of control involves the following steps:

Steps in a Control Process: There are three basic steps in a control process
• Establishing standards.
• Measuring and comparing actual results against standards.
• Taking corrective action.

Establishing standards: The first step in the control process is to establish standards against which results can be measured. The standards the managers desire to obtain in each key area should be defined as far as possible in quantitative terms. Standards expressed in general terms should be avoided. Standards need to be flexible in order to adapt to changing conditions. The standard should emphasis the achievement of results more than the conformity to rules and methods. If they do not do so, then people will start giving more importance to rules and methods than to the final results.

Measuring and comparing Actual Results against Standards: The second step in the control process is to measure the performance and compare it with the predetermined standards. Measurement of performance can be done by personal observation, by reports, charts and statements. If the control system is well organized, quick comparison of these with the standard figure is quite possible. This will reveal variations.

Taking Corrective Action: After comparing the actual performance with the prescribed standards and finding the deviations, the next step that should be taken by the manager is to correct these deviations. Corrective action should be taken without wasting of time so that the normal position can be restored quickly.

Types of Control
Most control methods can be grouped into one of the two basic tyoes:
• Future-oriented control
• Past oriented control
Past Oriented Controls: These are also known as post-action controls and measure results after the process. They examine what has happened in a particular period in the past. These controls can be used to plan future behaviour in the light of past errors or successes.

Future-Oriented Controls: These are also known as steering controls or feedforward controls and are designed to measure results during the process so that action can be taken before the job is done or the period is over.

Essentials of Effective Control Systems:

1- Suitable
2- Timely and forward looking
3- Objective and Comprehensive
4- Flexible
5- Economical
6- Acceptable to organization Members
7- Motivate people to high performance

Control Techniques

A variety of tools and techniques have been used over the years to help managers control the activities in their organizations. They are:

1- Budgeting
2- Standard Costing
3- Responsibility Accounting
4- Reports
5- Standing Orders, Rules and Limitations
6- Personal Observation

Q1 Write a note on systems theory of organization.

System approach of management represents new thinking and latest developments related to organization and management. It was developed after 1950 emphasising interdependence and interrelationship among various activities of organization. Basically this approach aims at identifying the nature of relationship among various components of the organization which is considered as larger system. The term system may be defined as a set of interrelated and interacting components assembled in a particular sequence as to produce some results. These components may also be viewed as sub-systems of larger system. It is only through these sub-systems the larger system operates, thus larger system can be viewed as a whole entity or totality. The various sub-system which are involved in the functioning of larger one are closely related to each other and to a s system as a whole. Similarly, these sub-systems interact with each other by getting influenced and influencing others. Every system has sub-system and every sub-systems may be considered as a system because it may have sub-systems. Thus in a system, there is a wheel within wheel making and contributing to larger system. Every system has certain boundaries, and within these there lies internal environment which mainly consist of internal and controllable variables. Beyond these set boundaries there exists external environment which is by and large outside the control of the system.

Types of System

Systems may be broadly classified into four categories-

1- Physical
2- Mechanical
3- Biological
4- Social System


Q2 Write a brief note on the three types of individuals according to Sheldon’s
physiognomy theory

William Sheldon has presented a unique body-type-temperamental model that represents a link between anatomical/psychological traits and characteristics of an individual with his behaviour. Sheldon identifies some relationship between the physique types of individuals and their personality temperaments. He identifies three body types:

(i) Endomorph: He is bulky and beloved. The person seeks comfort, loves fine food, eats too much, jovial, affectionate and liked-by-all persons.

(ii) Mesomorph: He is basically strong, athletic and tough. He is fond of muscular activity; he tends to be highly aggressive and self-assertive.

(iii) Ectomorph: These people are thin, long and poorly developed physically. Though physically week, he leads the league in the intellectual department. He is labeled as absent-minded, shy but brilliant.

Q3 State the features of leadership

Leadership is a great quality and it can create and convert anything. There are many definitions of leadership.

Nature or Characteristics Features of Leadership

4- Leadership implies the existence of followers: We appraise the qualities of leadership by studying his followers. In an organization leaders are also followers for e.g.:- Supervisor works under a branch head. Thus, in a formal organization a leader has to be able to be both a leader as well as a follower, and be able to relate himself both upward and downward.
5- Leadership involves a community of interest between the leader and his followers: In other words, the objectives of both the leader and his men are one and the same. If the leader strives for one purpose and his team of workers for some other purpose, it is no leadership.
6- Leadership involves an unequal distribution of authority amons leaders and group members: Leaders can direct some of the activities of group members, i.e., the group members are compelled or are willing to obey most of the leader’s directions. The group members cannot similarly direct the leader’s activities, though they will obviously affect those activities in a number of ways.
7- Leadership is a process of Influence: Leadership implies that leaders can influence their followers or subordinates in addition to being able to give their followers or subordinates legitimate directions.
8- Leadership is the function of simulation: Leadership is the function of motivating people to strive willingly to attain organizational objectives. A successful leader allows his subordinates (followers) to have their individual goals set up by themselves in such a way that they do not conflict with the organizational objectives.
9- A leader must be exemplary: A leader must set an ideal before his followers. He must stimulate his followers for hard and sincere work by his personal behaviour. In other words a leader must set an exemplary standard before his followers.
10- A leader ensures absolute justice: A leader must be objective and impartial. He should not follow unfair practices like favouritism and nepotism. He must show fair play and absolute justice in all his decisions and actions.

Q4 Bring out the principles of Scientific Mangement.

Science may be described – “As a systematic body of knowledge pertaining to an area of study and contains some general truths explaining past events or phenomena.”

The above definition contains three important characteristics of science. They are –
1- It is a systematized body of knowledge and uses scientific methods for observation.
2- Its principles are evolved on the basis of continued observation and experiment and
3- Its principles are exact and have universal applicability without any limitation.
Scientific Management has the following principles-
1- Management is a systematized body of knowledge and its principles have evolved on the basis of observation.

2- The kind of experimentation (as in natural sciences) cannot be accompanied in the area of management since management deals with the human element.

In management, it is not possible to define, analyse and measure phenomena by repeating the same conditions over and over again to obtain. The above observation puts a limitation or management as a science. Management like other social sciences can be called as ‘inexact science’.

Q5 Explain the self theory of personality.

Skimmer’s Behaviouristic Learning theory of personality is characterized by a rejection of an inner “autonomous” man as the cause of human actions and a disregard for physciological genetic explanations of behaviour. Skimmer contends that behaviour is lawfully determined, predictable, and environmentally controlled. Further, he holds that the fundamental principles underlying human behviour are mostly readily discerned by studying lower organisms. E.g. rats, pigeons.

His basic assumptions about human nature are strong and explicit. Behaviouristic learning theory reflects a strong commitment to determinism, elementalism, environmentalism, changeability, objectivity, reactivity and knowlability. The basic assumptions to rationality-irrationality and homeostasis-heterostasis are not applicable to Skimmer’s position since he rejects internal sources of behaviour.

Self-Esteem and Self-Monitoring are the two factors which influence the organizational behaviour

1- Self-Esteem: Self-esteem is related to aspects individuals regard themselves as capable to achieve success. The research on self-esteem has revealed that individuals with high self-esteem tend to take on more challenging assignments and of unconventional nature. People with low self-esteem on the contrary, are characterized by their susceptibility to extend influences and approval seekers from other. They depend on the receipt of positive evaluations from others.
2- Self-Monitoring: Self-monitoring is a personality trait that has recently received increasing attention. Self-monitoring is an individual’s ability to adjust his behaviour to external factors and situations. Individuals with high self-monitoring traits show greater adaptability to adjust themselves with external situations. They can bahave differently in different situations. Hence, there is very less behavioural consistency between who they are and what they do. It can be hypothesized that individuals high in self-monitoring are likely to be more successful managers who at times are required to play multiple and even contradicting roles to perform their managerial activities.

Q6 Discuss the financial and non-financial incentives of motivating the performance of
employees.

Financial Incentives

Right from the initial stages of development of management knowledge till today monetary rewards assume significant role in motivating employees. Money is considered the most powerful motivator because by spending money, the employees satisfies his physciological and security needs. Monetary rewards which are also known in pecuniary rewards are those associated directly or indirectly with money. Wage and salary, are most important monetary rewards. Other monetary rewards are bonus, profit sharing, retirement benefits, vacation pay, free medical service, etc. Monetary rewards play an important role as a mainspring of motivation. Money does not only satisfy lower level needs such as physical and security need, but also needs of social status and power. Therefore, money is considered as basic incentive for individual and it motivates him to the large extent if such rewards are linked with performance.

In the economy like ours, it is safe to assume that all employees regardless of their rank and file perceive money as an important reward. Majority of employees, even working at the higher level, recognize significant role of monetary reward. Many multinational companies in India have been successfully attracting best brain of the country in the various fields by offering them higher monetary rewards only but in order highly developed countries like USA, Japan, Uk and Germany, etc. situation regarding monetary reward is different. Due to higher level of per capita income and handsome payments made to the employees by the organization they tend to be motivated more by non-monetary rewards such as appreciation, recognition, self-achievement, self-fulfulment , etc. However they still have attraction for monetary rewards.

Non-Financial Incentives
Reward or incentives which are not measurable in term of money are known as non-monetary rewards. They are intangible and designed to meet higher order needs of employees. The individuals, particularly working at the higher level of organization, attach greater importance to social and psychological needs. These needs cannot be satisfied by money alone. Non-monetary rewards thus aim at satisfying higher order needs such as ego needs and need of self-actualisation. Non-monetary rewards mainly include meaningful and interesting jobs, career advancement opportunity, supportive supervision, participation in management and quality circles, etc. Some of these are-

1- Role of job design in motivation
2- Job enlargement
3- Job enrichment
4- Quality control circles
5- Supportive supervision


Q7 Describe Vroom’s Expectancy theory of Motivation.
Expectancy theory was developed by Victor H. Vroom. It is based on the notion that human behaviour depends on people’s expectations concerning their ability to perform tasks and tp receive desired rewards. The expectancy theory argues that the strength of a tendency to act in a certain way depends in the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of the outcome to the individual. It includes three variables which Vroom refers to as –

i) Valance: Valance means the strength of an individual’s preference for a particular outcome. A valance of zero occurs when the individual is indifferent towards the outcome. The valance is negative when the individual prefers not attaining the outcome to attaining it.
ii) Instrumentality: Instrumentality refers to the relationship between performance and reward. It refers to a degree to which a first level outcome (e.g.: superior performance) will lead to a desired second level outcome (e.g.: promotion). If people perceive that their performance is adequately rewarded the perceived instrumentality will be positive. On the other hand, if they perceive that performance does not make any difference to their rewards, the instrumentality will be low.
iii) Expectancy: People have expectancies about the likelihood that an action or effort on their part will lead to the intended performance.Workers will be motivated by the belief that their performance will ultimately lead to payoffs for them. Expectancy is the probability that a particular action will lead to a particular first level outcome.

In sum, Vroom emphasizes the importance of individual perceptions and assessments of organizational behaviour. The key to “expectancy” theory is the “understanding of an individual’s goals” – and the linkage between “effort” and “performance” between “performance” and “rewards” and between “rewards” and “individual-goal satisfaction”. It is a contingency model, which recognizes that there is no universal method of motivating people. Because we understand what needs an employee seeks to satisfy does not ensure that the employee himself perceives high job performance as necessarily leading to the satisfaction of these needs.



Q8 Discuss the role of teams and groups in organizations.

Management Process and Organization Behaviour

Q1 Explain the various functions of Management.

Characteristics of Management
The following are salient characteristics of Management-
1- Management aims at reaping rich results in economic terms.
Manager’s primary task is to secure the productive performance through planning, direction and control. It is expected of the management to bring into being the desired results. Rational utilization of available resources to maximize the profict is the economic function of a manager.

2- Management also implies skill and experience in getting things done through People.
Management involves doing the job through people. The economic function of earning profitable return cannot be performed without enlisting co-operation and securing positive response from “people”. Getting the suitable type of people to execute the operations is the significant aspect of management.

3- Management is a process.
Management is a process, function or activity. This process continues till the objectives set by administration are actually achieved.

4- Management is a universal activity.
Management is not applicable to business undertakings only. It is applicable to political, social, religious and educational institutions also. Management is necessary when group effort is required.

5- Management is a Science as well as an Art.
Management is an art because there are definite principles of management. It is also a science because by the application of these principles pre-determined objectives can be achieved.

6- Management is a Profession.
Management is gradually becoming a profession because there are established principles of management which are being applied in practice, and it involves specialized training and is governed by ethical code arising out of its social obligations.

7- Management is an endeavour to achieve pre-determined objectives.
Management is concerned with directing and controlling of the various activities of the organization to attain the pre-determined objectives. Every managerial activity has certain objectives. In fact, management deals particularly with the actual directing of human efforts.

8- Management is a group activity.
Management comes into existence only when there is a group activity towards a common objective. Management is always concerned with group efforts and not individual efforts. To achieve the goals of an organization management plans, organizes, co-ordinates, directs and controls the group effort.

9- Management is a system of authority.
Authority means power to make others act in a predetermined manner. Management formalizes a standard set of rules and procedure to be followed by the subordinates and ensures their compliance with the rules and regulations.

10- Management involves decision-making.
Management implies making decisions regarding the organization and operation of business in its different dimensions. The success or failure of an organization can be judged by the quality of decisions taken by the managers. Therefore, decisions are the key to the performance of a manager.

11- Management implies good leadership.
A manager must have the ability to lead and get the desired course of action from the subordinates.

12- Management is dynamic and not static.
The principles of management are dynamic and not static. It has to adopt itself according to social changes.

13- Management draws ideas and concepts from various disciplines.
Management is an interdisciplinary study. It draws ideas and concepts from various disciplines like economics, statistics, mathematics, psychology, sociology, anthropology etc.

14- Management is Goal Oriented
Management is a purposeful activity. It is concerned with the achievement of pre-determined objectives of an organization.

15- Different Levels of Management
Management is needed at different levels of an organization namely top level, middle level and lower level.

16- Need of organization
There is a need of an organization for the success of management. Management uses the organization for achieving pre-determined objectives.

17- Management need not be owners
It is not necessary that managers are owners of the enterprise. In joint stock companies, management and owners (capital) are different entities.

18- Management is intangible.
It cannot be seen with the eyes. It is evidenced only by the quality of the organization and the results i.e. profits, increased productivity etc.

Various Functions of Management
 Functions of Top Management
- Determination of goals and objectives.
- Policy framing.
- Formulation of plans to carry out objectives and policies.
- Mobilisation of resources to implement the plans.
- Motivating personnel for effective performance through appropriate leadership.
- Co-ordination and communication.
- Controlling operations to ensure realization of set goals or objectives.

 Functions of Middle Management
- To run the details of the organization, leaving the top officers as free as possible of their other responsibilities.
- To co-operate in making a smoothly functioning organization.
- To understand the interlocking of departments in major policies.
- To achieve the co-ordination between the different parts of the organization.
- To build up a contented and efficient staff where reward is given according to capacity and merit and not according to change or length of service.
- To develop leaders for the future by broad training and experience.
- To build up a company spirit where all are working to provide a product or service wanted by others.

 Functions of Lower Level Management
- Planning the day-to-day work of their sections and assigning the jobs to the workers.
- To issue instructions to worker and supervise their functioning.
- Making available the required materials, tools, etc. at the work place.
- To provide on-the – job training to the workers.
- Looking after the proper maintenance of tools, machinery etc.
- To solve problems of the workers.
- Communicating those problems of workers which are not solved at their level to the higher officials.
- Acting as liason officers between the middle management and the workers.
- To maintain good human relations and maintain close personal contact with workers.
- To maintain discipline among the workers and develop in them the right approach for work.
- To advice middle management about working environment.
- Sending reports and statements to middle management.

Q2 Define departmentation. Bring out the several bases of department.

Departmentation process is an essential part of organizing process. The formal structure of organization is created through the process of departmentation. It is a process of grouping of various activities into well defined divisions or departments. Such departments or divisions operate under the control of a manager known as departmental head. He has adequate authority over the activities and employees working there and he is ultimately responsible for the smooth functioning of the department.

In other words, departmentation is a process of dividing and sub-dividing each activity in small jobs and tasks and further combining and grouping them into administrative departments. By conducting the process of departmentation, the activity structure of organization is prepared. The activities so grouped up are placed horizontally and around these groups, authority structure in also created.
The process of departmentation is used at the various levels of the organization. The departmentation may be of three types.

(a) Primary departmentation.
(b) Intermediate departmentation.
(c) Ultimate departmentation.

(a) Primary departmentation takes place at the top level of organization. Through such departmentation process, basic or primary acitivities of the organization are grouped into various functional groups such as production, marketing, finance, purchase, personnel etc.
(b) Intermediate departmentation is used at the middle level of organization for grouping departmental acitivities in various sub-groups. For example the activities of personnel department are further grouped in sub-groups such as, recruitment and selection, promotion and transfer, wage and salary, administration and training etc.
(c) Ultimate departmentation implies grouping of activities, which are to be performed at the lowest level of organization such as core activities.

Bases of Departmentation
There are many alternative bases or patterns for departmentalizing organizational acitivies. The most common patterns are grouping by functions, products, processes, territories and customers.

Geographical Departmentation
In case of organizations having widely scattered business operations with nation-wide or global markets, geographical departmentation becomes more pressing need of organization. In geographical departmentation, all acitivities in a given area are grouped in one group and placed under the control of one manager.
This pattern of departmentation is considered to be secondary in nature as it can be used in respect of some activities or functions to be performed areawise. Thus first of all those functions and activities are grouped and it is followed by geographical departmentation.




Functional Departmentation
Due to growing complexities and added dimensions to management the functional departmentation has become quite popular. Since all organizations are engaged in the creation of utility, they undertake and perform various activities and functions for achieving objectives. If the jobs and tasks of organization are grouped into different groups or departments strictly on the basis of various functions which are to be performed in respect of those jobs and tasks, such pattern of departmentalizing is known as functional. This pattern is to be used by profit as well as non-profit organizations. In a typical profit organization, activities are grouped on the basis of functions into various departments such as production, purchase, finance, personnel, public relation and accounting, etc. These departments are known as functional departments.



Functional Departmentatlisation

Product of Service Departmentation
Compared to functional departmentalization, product grouping is considered to be more integrating and unifying pattern of departmentation. This pattern is most common with large multi-product lines or several products. In this, pattern organizational activities are grouped around the product lines or several products. In this, pattern organizational activities are grouped around the product lines or products. The organization identifies important functions which are necessary to be performed with regards to products such as engineering , marketing and financing other functions. These functions are attached to various product departments.
In product departmentation, each department of product operates as multifunctional unit. Because all necessary functions such as production, marketing, personnel and finance, etc. are being performed in every product department. In a pure product departmentation, the head of every product is usually delegated enough authority for performing various functions and top executive is mainly concerned with the overall planning, control and coordination of various product departments.


Process/Equipment Pattern of Departmentation
In addition to preceding pattern of departmentation, activities of organization can also be grouped according to process or equipment used. This pattern of grouping activities is often used by manufacturing organization having an assembly line production or production system which may consists of various processes to be conducted in a logical sequence. The output of particular process becomes input for next succeeding process and same is repeated till the production of finished product.





Process Departmentation
Customer/Market Pattern of Departmentation
This pattern of departmentation is often used by the organization engaged in producing and distributing goods and services for various groups of customers. In this pattern activities of organization are grouped according to the types of customer to be served. The rationale behind this pattern of departmentation is to serve different needs of various sets of customers in efficient manner.



Composite Departmentation
There is no hard and fast rule that organization should adopt a particular pattern of departmentation for grouping its activities. Each of the preceeding pattern of departmentation has been presented in its pure form. But in actual practice, hybrid of two or more patterns is developed according to the needs of organization and then used profitably. It is found that some organizations combine product form with functional form while others develop combination of functional and geographical departmentation according to needs.




Composite Departmentation – Product and Geographical Form