It is true that departmentation is helpful to the enterprise in many ways. But it is not free from limitations. Its main limitations are:

  1. There is the problem of co-ordination. The greater the number of departments, the more difficult will be the task of co-ordination.

In this connection, it may be noted that the lack of proper co-ordination would impair the managerial efficiency and the overall results of the enterprise.

  1. There is also the problem of communication. The work of communication becomes more difficult.
  2. Under departmentation, there is also the problem of supervision and control.
  3. Departmentation is expensive in terms of money and efforts. In other words, it increases the cost of managing the concern.
  4. Under departmentation, because of the layering of executives, the operative personnel are far removed from the top management.
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