If you are talking about corporate America, departamentalization is often functional, that is, according to the duties of each group and their function within the organization.
What is positive about categorizing, organizing, and separating branches and fuctions is that the organizational leaders can easily access and measure the quality of work of each department, and can generate reports showing the percentage of productivity that each department represents for the worth and the earnings of the corporation.
Whatever were negative about departamentalization would come straight from the leaders, and will ultimately be the leader's fault. Why? Because (just like in sports), a leader (like a coach) would make sure that each department knows that their specific additons to the corporation are important to complete the mission at hand.
A leader who is weak and does not reassert the value of his employees and departments will ultimately create a silent war among departments, one thinking to be better than the other. A leader with a vision, however, would prevent that from happening by clearly ILLUSTRATING through graphs, charts, and goal maps how EACH department will contribute to the ultimate goals. This way, departamentalization would not be seen as a way to micromanage, but as a way to unite and conquer.
Process departmentalization is the practice of creating separate departments within a firm where each department specializes in one particular part of the production process.
The greatest advantage to this sort of departmentalization is that it allows for specialization. The people in the department are focused on one task and the managers can be expert in that task.
The greatest disadvantage of this type of departmentalization is that it isolates the department from the other parts of the process. The department may become excessively concerned with its own function instead of acting in ways that will benefit the overall production process and firm.