Elements of Organization Process

Key Elements of Organization Process
The following may be said to be the key elements in the process of organization.
1) Departmentation,
2) Delegation and
3) Decentralization.

1. Departmentation
Departmentation implies the grouping of various activities on the basis of their similarity, into separate units. Departmentation of the enterprise activities can be done by:
a) Functions: production, sales, finance and personnel departments can be created.

b) Production: For each product or group of products, a separate department is created.

c) Territory: For each geographical division or territory, a separate department is created.

d) Customer: Departmentation by customer is followed to look after the sales function where, in the interest of efficiency and economy, special attention needs to be given to different customers.

e) Number: In case departmentation by numbers, activities are grouped on the basis of their performance by a certain number of persons, whereas under departmentation by time, activities are grouped on the basis of the time of their performance.

2. Delegation
The delegation has three important features, namely,
a) Assignment of duties and responsibilities.
b) Delegation of authority to perform the assigned duties and responsibilities.
c) Accountability.

3. Decentralization

Decentralization is the opposite of centralization. Under centralization, the decision-making authority is vested in the hands of one or a few individuals.
Decentralization refers to dispersal of decision-making authority. It means that decisions are to be made by persons and at places away from the centre.
Decentralization may take the form of:
a) departmentation or divisionalsation of enterprise activities;
b)dispersal of decision-making powers among executives at various levels.