Understanding the Relationship Between Departmentalization and Management Performance : First Bank’s Exemplary Model

Contextual factors, external and internal requirements make the business case for departmentalization as a technique for management performance. This is important because customers and employees expect better performance from bank management. They recognize high quality credit risk policies and profitability as basic measures of management performance. Departmentalization is vital in today’s banking environment where corporate policies, government regulations, customer requirements, as well as competition demand improvement in performance. This makes it essential that each organizational department has a clear definition of what it is expected to achieve. Departmentalization therefore helps to define the result for which each department is responsible. Beyond defining responsibilities for results, organizational architecture requires defining several other dimensions of basic functions that will make each department make meaningful contribution to effective management performance. 185 respondents participated in the study conducted through the empirical research design and the result showed positive association between departmentalization and management performance. The study was not entirely exhaustive, and further study could examine the relationship between organizational performance and centralization as a measure for effective management performance. Functional departmentalization is often typical at the top management level; it is therefore, a recommendation that it should be properly applied to improve management performance