Running multiple Drupal installations on one URL: is it advisable?
Not only is it not a problem but it's actually a quite common practice!

Check out this link for some tips: multisite howtos

The only suggestion I have is to give each site a subdomain rather than a subfolder, in my experience this works a lot better:


dept1.domainname.org
dept2.domainname.org
dept3.domainname.org


(with all 3 hosts pointing to the same directory)

Setup

To set this up, just add a separate configuration folder under sites for each one:


/sites/dept1.domainname.org/setings.php // dept1 production
/sites/dept1.stagingdomain.org/setings.php // dept1 staging
/sites/dept1.domainname.local/setings.php // dept1 development
and so on...


Also, you should have separate files directories for each site and you can place site-specific (custom) modules on a modules subdirectory under the respective site's settings folder, to keep the /sites/all/modules directory uncluttered!