Although organizations have much in common with one another, they differ in many ways. Some organizations are large, and some are small. Some operate in one product area, while others operate in many diversified areas. Some operate in a small geographical area, whereas others do business in many countries of the world. Thats where the role of workforce management systems comes into the fore. To cope with these varied objectives, strategies and situations, managers adopt different workforce management systems.

Departmentation is the process of dividing the organization into manageable subunits. The subunits are often referred to as departments, divisions or sections. Functional departmentation is the process of dividing the organization into units on the basis of the firms major activities. It involves grouping employees according to the broad tasks they perform. Normally, separate departments are created in workforce management systems for all the key activities of the business.

If the organization or given department is large, or as the organization grows, major departments can be subdivided. These sub-divisions are called derivative departments. The essential idea is to take advantage of specialization. As organizations are not static, they grow in size either by broadening its product line or by expanding geographically.

Further, as the size of the organization increases, some of the disadvantages become more apparent. The organization is forced to look for other systems in tune with the requirements. In such situations, managements will opt for various other types of departments, in focusing on the product or market. One of the most common ways in which businesses grow is by increasing the number of products they make and sell. If the organization is successful, several product lines may attain such high sales that they require a separate division.