Theory of Departmentalization.
The theory of departmentalization addresses itself to the problem of bases on which work may be divided and departments created. Luther Gulick, identifies four of them through which the problem of assignment may be solved. These are identified as purpose, process, persons, and place which are popularly known as the 4p’ s of Gulick.
In the first place the work may be divided on the basis of the major purpose or function. Here one has to identify the major functions and goals of organization and create departments for each one of such functions. Gulick emphasizes on the self-containment of the organization and low coordination costs involved as advantages of this base.
Secondly, process or skills specialization is suggested as an alternative to purpose of this basis is accepted then all work based on similar process or skills should be grouped together since it involves use of same knowledge, skills and processes.
Specialization of work according to the clientele served is the third of the bases propounded by Gulick. Here he mentions the specialized skills that members of such department develop in serving the particular groups.
But this principle is not only inadequate for universal application, but coordination between such organizations becomes difficult on account of overlapping and duplication. Gulick also considers territory or place as another base.
Here all functions performed in a given area are clubbed together and departments created. This base may be fruitfully used for the intensive development of any area. The members of such departments also become area specialists.
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The theories of departmental organization are criticized on the basis that they are incompatible with each other. There is also overlap between them and they are also said to be vague.
Further, it is pointed out that the principles are prescriptive rather than descriptive in that they state how work should be divided rather than how work is actually divided. Organizations grow according to the dictates of the situation and in consonance with the requirements of efficiency and goal achievement.
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