Different types of activities are performed in a business enterprises. Those activities must be divided into the various unit. Then business enterprises can achieve ts pre-determined goal. In simple word, departmentation is the activities of dividing different activities into manageable units. Works or activities are divided on the basis of specific nature, specialized. Departmentation divides the large and complex functions and activities into smaller and flexible unit for efficient handling. 

According to y.k.Bhusan, "Departmentation is the process of grouping the activities into units for the purpose of administration." 

In conclusion, the activities of logical grouping of the closely related function activities into manageable units for the purpose of co-ordination is called departmentation.

The departmentation by function is explained as below:

It is the common and popular method of departmentation. Large size business enterprises perform different function. If the departments are created according to a various function that is called departmentation by function. Departments are created on the basis of function like production function staff function and human resources function and so on. The departmental managers are responsible for controlling the activity of their department and all these departmental heads are expert and specialize in their own area of work. The following figure makes us clear about departmentation by function.