The total work to be carried on must be grouped by kind or type into division, departments, sections and units. Likewise the work must be grouped into different levels; that is, the managerial hierarchy must be set up and defined. Means must also be devised to provide for coordination and integration of people and their activities.

There are five basic ways of grouping work activities. There are by function, location, geographical area, product, costumer, client and number of person. Let us examine each of these. Function. Grouping activities according to similar work, skill, knowledge and orientation is the most widely used of all bases of departmentation?

This is done with both “brain work” and manual work. Thus, companies group all the engineers together into an engineering department and all the personnel specialists into a personnel department. Electricians may be grouped together in the electrical section of the maintenance department. Departmentation by process is closely akin to functional grouping. Thud all electroplating, machining and electronic data processing may be grouped into separate departments.