What are the basic factors to be considered while creating departments in an Organization?

Thanks for the invitation

Very good question

Well......agreed with the excellent description

given by Mr.:Jetley

in fact he did it in perfectly and no more to add

Agreed with the answers to colleagues

As Answered by Mr. Alex and Mr. Raafat, it starts with the need of having a new department/group and evaluating the effectiveness it can bring to the organization structure, and to business..

Developing new departments and a work culture that values creativity and encourages innovation is imperative to an organization that desires to learn and produce new ideas or products. Effective planning and strategy is required before creating any new department in the organization because of it's heavy cost.

Should take in consideration the business type in itself, the hole activities offered by the organisation 

and it's size.

the Need to expand comes mainly

the specialty

the effectiveness

the structure

the potential

the vision of the near future

The organizational structure depends on the purpose of the organization (why does it exist?).According to that purpose we begin to define the required structure.

Strategy

The best approach to organizational design tailors it to a company's strategic plans. The plans, meanwhile, follow from a company's vision, which itself follows from the company's mission. Mission is a business' reason for being -- its purpose. Vision is a company's ultimate accomplishment, the realization of the mission. All strategy tries to fulfill the vision, and the organizational structure should support that effort. For instance, a company that has decided to expand to overseas markets might organize itself into geographical divisions. Changes in strategy call for an updated structural design.

Environment

The business environment that employees work within cannot be ignored by organizational designers. An unpredictable, rapidly changing environment demands flexibility, adaptability and interdepartmental cooperation. In such a situation, a rigid, mechanized structure would stifle the agility and responsiveness of staff. Designers can instead build an organic, horizontal structure, which flattens management levels and decentralizes decision-making. A stable environment, meanwhile, allows for the controls, well-defined tasks and centralized authority found in the mechanistic structure with its vertical tiers of increasing power.

Size

Small businesses with few people often have an overlap of roles, behave informally and don't write a lot of rules. Since this organization arises organically, it would be a mistake to try to overlay a formal, mechanistic structure on it. Doing so would be an exercise in futility. Also, the unnecessary bureaucracy could get in the way of operations. Large organizations need more control and oversight. A mechanistic structure creates clear accountability and responsibility and is, therefore, suitable for companies with many employees.

Age

At the beginning of a company's life, its small size allows the organic structural qualities that encourage flexibility and responsiveness. As it matures and expands, a company begins to mechanize, adding rules, policies and procedures; closely defined tasks; extensive internal systems of control and command chains. In short, maturity gives rise to bureaucracy. The older the company, the more likely the bureaucracy has become unwieldy, presenting a barrier to innovation, adaptability and quick reactions. Organizational design should factor in the extent to which an older company needs to restructure itself to reduce its mechanized structure.

Structural Designs

Structural designs have pros and cons, so designers should consider the structural design carefully. Two common structures are the functional and divisional structures. The functional structure creates departments according to business activities, such as production, marketing and finance. Having activities so grouped increases efficiency but can lead to barriers between departments. The divisional structure groups people according to product, customer or geography, in effect creating small companies with their own marketing, finance and production capabilities. This makes divisions focused and responsive, but duplicates business activities between divisions and within the company as a whole.

I agree with all answers given by colleagues.