for an organizational role to exist and be meaningful to people, it must incorporate: (1) verifiable...
TRANSCRIPT
For an organizational role to exist and be meaningful to people, it must incorporate:
(1) verifiable objectives, which, are a major part of planning.
(2) a clear idea of the major duties or activities involved.
(3) an understood area of discretion or authority so that the person filling the role knows what he can do to accomplish goals.
Organizing includes: the identification and classification of required
activities. the grouping of activities necessary to attain
objectives. the assignment of each grouping to a manager with
the authority horizontally and vertically .
Organization is a total system of social and cultural relationships.
For managers, the term organization implies a formalized intentional structure of roles or positions.
People working together must fill certain roles.
the roles people are asked to fill should be intentionally designed to ensure that required activities are done and people can work smoothly, effectively, and efficiently in groups.
Example: corporate headquarters, division, and department) in the organization structure.
Discuss the nature of the assigned depart mentation
Identify one Company that uses the given depart mentation and draw a rough chart on the board as an example
List Advantages List Disadvantages Leader and two other members of
the group has to present the points within three minutes
GROUPS & ASSIGNED TOPICS:
1.Product based depart mentation2.Process based depart mentation3.Matrix structure/organization4.Customer based depart mentation5.Time based depart mentation6.Function based structure7.Geography/territorial depart mentation 8.Strategic business units –SBU’s
Formal OrganizationFormal organization means the intentional structure of roles in a formally organized enterprise.
The structure must furnish an environment in which individual performance, both present and future, contributes most effectively to group goals.
Formal organization must be flexible. There should be room for discretion, for
advantageous utilization of creative talents, and for recognition of individual capacities.
Informal Organization Chester Barnard described informal
organization as any joint personal activity without conscious joint purpose, even though contributing to joint results.
It is a network of personal and social relations not established or required by the formal organization but arising spontaneously as people associate with one another.
Example: It might include the machine-shop group, the sixth floor crowd, the Friday evening bowling gang.
The word department designates a distinct area, division, or branch of an organization over which a manager has authority for the performance of specified activities.
It may be the production division, the sales department, the West Coast branch, the market research section.
Organization levels exist because there is a limit to the number of persons a manager can supervise effectively.
A wide span of management is associated with few organizational levels; a narrow span, with many levels.
In every organisation, it must be decided how many subordinates a superior can manage.
Lyndall Urwick found the ideal number of subordinates for all superior authorities to be four, while at the lowest level of organization, the number may be eight or twelve.
etc
etc
Formal organisation
Informal organization Chess group
Informal organization Bowling team
Informal organization Morning – coffee “regulars”
Department Managers
Division Managers
Vice-Presidents
President
ADVANTAGES
•Close supervision
•Close control
•Fast communication between subordinates and superiors
DISADVANTAGES
•Superiors tend to get too involved in subordinates’ work
•Many levels of management
•High costs due to many levels
•Excessive distance between lowest level and top level
ADVANTAGES
•Superiors are forced to delegate
•Clear policies must be made
•Subordinates must be carefully selected
DISADVANTAGES
•Tendency of overloaded superiors to become decision bottlenecks
•Danger of superior’s loss of control
•Requires exceptional quality of managers
Levels are expensive as they increase, more and more effort and money are devoted to managing.
Due to additional managers, the staffs to assist them, and of coordinating departmental activities, plus the costs of facilities for the personnel.
Departmental levels complicate communication. An enterprise with many levels has greater
difficulty communicating objectives, plans, and policies downward through the structure.
Omissions and misinterpretations occur as information passes down the line.
Numerous departments and levels complicate planning and control.
A plan that may be definite and complete at the top level loses coordination and clarity as it is subdivided at lower levels.
The classical school approach to the span of management deals with specifying numbers of subordinates for an effective span.
The principle of the span of management states that there is a limit to the number of subordinates a manager can effectively supervise, but the exact number will depend on the impact of various factors.
Subordinate Training The better the training of subordinates, the
fewer the number of necessary superior-subordinate relationships.
Well-trained subordinates require not only less of their managers’ time but also less contact with their managers.
Factors Influencing the Span of Management
Narrow span (a great deal of time spent with subordinates) related to:Little or no trainingInadequate or unclear authority delegationUnclear plans for non-repetitive operationsNon verifiable objectives and standardsFast changes in external and internal environmentsUse of poor or inappropriate communication techniques, including vague instructionsIneffective interaction of superior and subordinateIneffective meetingsGreater number of specialties at lower and middle levelsIncompetent and untrained managerComplex taskSubordinates’ unwillingness to assume responsibility and reasonable risksImmature subordinates
Wide spans (very little time spent with subordinates) related to:Thorough subordinate trainingClear delegation to undertake well-defined tasksWell-defined plans for repetitive operationsVerifiable objectives used as standards.Slow changes in external and internal environmentsUse of appropriate techniques such as proper organization structure, written and oral communicationEffective interaction between superior and subordinateEffective meetingsNumber of specialties at upper levels (top managers concerned with external environment)Competent and trained managerSimple taskSubordinates’ willingness to assume responsibility and reasonable risksMature subordinates
Clarity of Delegation of Authority
If a manager clearly delegates authority to undertake a well-defined task, a well-trained subordinate can get it done with a minimum of the manager’s time and attention.
But if the subordinate’s task is not clearly defined, or if the subordinate does not have the authority to undertake it effectively.
Either the task will not be performed. Or the manager will have to spend a
disproportionate amount of time supervising and guiding the subordinate’s efforts.
If plans are well defined, if they are workable, if the authority to undertake them has been delegated.
And if the subordinate understands what is expected, little of a supervisor’s time will be required.
Example: In one large-volume work-clothing
manufacturer’s plant, production supervisors operated satisfactorily with as many as thirty subordinates.
If plans cannot be drawn accurately and subordinates must do much of their own planning, they may require considerable guidance.
Use of Objective Standards
A manager must find out through use of objective standards, whether subordinates are following plans.
Good objective standards, revealing with ease need to be selected.
Any deviations from plans, enable managers to avoid many time-consuming contacts.
Enables to direct attention to exceptions at points critical to the successful execution of plans.
Rate of Change
Certain enterprises change much more rapidly than others.
The rate of change is an important determinant of the degree to which policies can be formulated and the stability of can be maintained.
The effect of slow change on policy formulation and on subordinate training is dramatically shown in the organization of the Roman Catholic Church.
This organization, in terms of durability and stability, can probably be regarded as the most successful in the history of Western civilization.
Communication Techniques
If every plan, instruction, order, or direction has to be communicated by personal contact and if a staffing problem has to be handled orally, a manager’s time will obviously be heavily burdened.
Busy top executives widen their span of management by insisting upon summary presentation of written recommendations, even when these involved enormously important decisions.
An ability to communicate plans and instructions clearly and concisely also tends to increase a manager’s span.
The subordinate's job is greatly facilitated by superiors who can express themselves well.
Continue….. In many instances, face-to-face meetings are
necessary. Many situations cannot be completely handled
with written reports, memorandums, policy statements, planning documents, that do not involve personal contact.
Other best way of communicating a problem, or “getting a feel” for how people really think on some matter is to spend time in personal contact.
Percentage of executive’s time spent can be reduced by better training, better policymaking and planning.
Clearer delegation, more thorough staff work, better control systems and objectives standards, are better application of sound principles of management.
Example: Merit ratings, insurance programs,
grievance procedures, and other personnel matters now requiring supervisors’ time in face-to-face relationships have reduced their traditionally wide spans.
Variation by Organization Level
Several research projects have found that the size of the most effective span differs by organization level.
The degree of specialization by individuals (“person specialization”) was the most important variable affecting span.
When a greater number of specialties was supervised, effective spans were narrower at lower and middle levels of organization but were increased at upper levels.
Because top-level managers were most concerned with the interface of the enterprise with its external environment, strategic planning, and major policy matters.
Routineness of an operation appeared to have little effect at any level, and size (in terms of personnel) had little effect at lower levels but a positive effect of middle levels.
Other Factors
Example: A manager who is competent and well trained can effectively supervise more people than one who is not.
Positive attitudes of subordinates toward assumption of responsibility, as well as their willingness to take reasonable risks.
Personal capacities as comprehending quickly, getting along with people.
Commanding loyalty and respect. Manager’s ability to reduce the time he
or she spends with subordinates.
The structure must reflect objectives and plans, because activities derive from them.
It must reflect the authority available to an enterprises management.
Authority in a given organization is a socially determined right to exercise discretion.
Organization structure, like any plan, must reflect its environment. Just as the premises of a plan.
It must be designed to work, to permit contributions by members of a group, and to help people gain objectives efficiently in a changing future. A workable organization structure can never be static.
Since the organization is staffed with people, the organization structure must take into account people’s limitations and customs.
Organisation process consists of: Establishing enterprise objectives Formulating supporting objectives, policies and
plans Identifying and classifying the activities necessary
to accomplish these objectives. Grouping these activities in the light of the
human and material resources available and the best way, under the circumstances, of using them.
Delegating to the head of each group the authority necessary to perform the activities.
Tying the groups together horizontally and vertically, through authority relationships and information flows.
3. Identification
and classification of required activities
4. Grouping of activities in light of resources and situations
5. Delegation of authority
6. Horizontal and vertical coordination of authority and information relationships
9. Controlling
7. Staffing
8. Leading
Parts 4, 5, 6 (Other Functions)
2. Supporting objectives, policies, and plans
Part 2 in the book (Planning)
1. Enterprise objectives
Feasibility Studies and Feedback
ORGANISING PROCESS
Departmentation by Simple Numbers
The method of departmentising is achieved by tolling off persons who are to perform the same duties and putting them under the supervision of a manager.
Technology has advanced, demanding more specialised and different skills.
Second reason is that groups composed of specialised personnel are frequently more efficient than those based merely on numbers.
Third reason – it is useful only at the lowest level of the organisation structure.
Limitation: As soon as any factor other than pure human
power becomes important, the simple-numbers basis of departmentation fails to produce good results.
Departmentation by Time
The oldest forms of departmentation, is grouping activities on the basis of time.
The use of shifts is common in many enterprises where for economic, technological, or other reasons the normal workday will not suffice. Examples:1. hospitals, where round-the-clock patient care is essential.
2. Fire department has to be ready to respond to emergencies.
3. A steel furnace cannot be turned on and off at will; the process of making steel is continuous and requires workers to work in three shifts.
Advantages
Services can be rendered that go beyond the typical 8-hour day, extending to 24 hours a day.
It is possible to use processes that require a continuing cycle.
Expensive capital equipment can be used more than 8 hours a day when workers in several shifts use the same machines.
Students attending classes during the day, for instance – find it convenient to work at night.
Disadvantages
Supervision may be lacking during the night shift.
There is the fatigue factor; it is difficult for most people to switch, from a day shift to a night shift and vice versa.
Having several shifts may cause problems in coordination and communication.
The payment of overtime rates can increase the cost of the product or service.
Departmentation By Enterprise Function
Grouping activities in accordance with the functions of an enterprise – functional departmentation.
Basic enterprise functions are production (creating utility or adding utility to a good or service),
Selling (finding customers, patients, clients, students, or members who will agree to accept the good or service at a price or for a cost).
Financing (raising and collecting, safeguarding, and expending the funds of the enterprise).
It has been logical to group these activities into such departments as engineering, production, sales or marketing, and finance.
Market
Research
Engineering Administration
Production planning
Financial planning
President
Assistant to President
Personnel
Marketing
Engineering
Production
Finance
Marketing planning
Preliminary design
Industrial engineering
Budgets
Advertising and promotion
Electrical engineering
Production engineering
General accounting
Sales administration
Mechanical engineering
Purchasing
Cost accounting
Sales
Hydraulic engineering
Tooling
Statistics and data
processing
Packaging
General production
Quality control
A FUNCTIONAL ORGANISATION GROUPING (MANUFACTURING COMPANY)
ADVANTAGES
Is logical reflection of functions. Maintains power and prestige of major functions Follows principle of occupational specialisation Simplifies training Furnishes means of tight control at top
DISADVANTAGES Deemphasise of overall company objectives Overspecialises and narrows viewpoints of key
personnel Reduces coordination between functions Responsibility for profits is at the top only Slow adaptation to changes in environment Limits development of general managers
It is the most widely employed basis for organizing activities and is present in almost every enterprise at some level in the structure.
They are the basis not only of departmental organization but also of departmentation at the top level.
Coordination of activities may be achieved through rules and procedures.
Also various aspects of planning, the organizational hierarchy, personal contacts and liaison departments has been used here.
DEPARTMENT BY TERRITORY OR GEOGRAPHY
Is common in enterprises that operate over wide geographic areas.
Activities in a given area or territory be grouped and assigned to a manager.
Western region
Southwest region
Central region
Southeast region
Eastern region
PRESIDENT
Marketing
Personnel
Purchasing
Finance
Personnel
Engineering
Production
Accounting
Sales
A TERRITORIAL, OR GEOGRAPHIC, ORGANISATION GROUPING (MANUFACTURING COMPANY)
GEOGRAPHIC, ORGANISATION GROUPING (MANUFACTURING COMPANY)
ADVANTAGES Places responsibility at a lower level Places emphasis on local markets and problems Improves coordination in a region Takes advantage of economies of local
operations Better face-to-face communication with local
interests Furnishes measurable training ground for
general managersDISADVANTAGES Requires more persons with general manager
abilities Tends to make maintenance of economical
central services difficult and may require services such as personnel at the regional level
Increases problem of top management control
Extent of use
It is especially attractive to large-scale firms or other enterprises whose activities are physically or geographically dispersed.
Is most often used in sales and in production.
It is not used in finance, which is usually concentrated at the headquarters.
Disadvantages Tends to lead to duplication of services
Customers are the key to the way activities are grouped when each of the different things an enterprise does is managed by one department head.
Example: I The industrial sales department of a wholesaler to cater to the requirements of clearly defined customer groups.
2.Educational institutions offering regular and extension courses to serve different groups of students.
Example: II the great central cash markets for agricultural products
Loan officers of commercial banks frequently specialize in fruit, vegetables, or grain
PRESIDENT
Community-city banking
Corporate banking
Institutional banking
Real estate and mortgage loans
Agricultural banking
ADVANTAGES
•Encourages concentration on customer needs
•Gives customers feeling that they have an understanding supplier (banker)
•Develops expertness in customer area
DISADVANTAGES
•May be difficult to coordinate operations between competing customer demands
•Requires managers and staff expert in customers’ problems
•Customer groups may not always be clearly defined (for example, large corporate firms vs. other corporate businesses)
CUSTOMER DEPARTMENTATION IN A LARGE BANK
Advantages
The extension services of universities such as night-school divisions, are arranged, with respect to time, subject matter, to appeal to an entirely different group of students.
PROCESS OR EQUIPMENT DEPARTMENTATION
Manufacturing firms group activities around a process or a type of equipment. Such a basis can be found in paint or electroplating process grouping. In this kind, people and materials are brought together in order to carry out a particular operation.
It is the electronic data processing department. As data processing have become expensive and complex, they have tended to be organised in a separate department.
PROCESS OR EQUIPMENT DEPARTMENTATION
ADVANTAGES
•Achieves economic advantage
•Uses specialised technology
•Utilises special skills
DISADVANTAGES
•Coordination of departments is difficult
•Responsibility for profit is at the top
•Is unsuitable for developing general managers
Engineering
Production
Marketing
Finance
Personnel
President
Punch presses
Welding
Electroplating
DEPARTMENTATION BY PRODUCT
Grouping activities on the basis of product or product lines has long been growing in importance in multiline, large-scale enterprises.
Enterprises adopting this form were organised by enterprise functions. Product managers, sales and service managers and engineering executives encountered problems of size.
Permits top management to delegate to a division executive extensive authority over the manufacturing, sales, service, and engineering functions that relate to a product to exact a considerable degree of profit responsibility from each of these managers.
It facilitates the use of specialised capital permits the maximum use of personal skills and specialised knowledge.
A PRODUCT ORGANISATION GROUPING (MANUFACTURING COMPANY)
Instrument division
Indicator lights
division
Industrial tools
division
Electronic meter
division
PRESIDENT
Marketing
Personnel
Purchasing
Finance
Engineering
Production
Accounting
Sales
Engineering
Production
Accounting
Sales
ADVANTAGES Places attention and effort on product line Facilitates use of specialised capital, facilities,
skills, and knowledge Permits growth and diversity of products and
services Improves coordination of functional activities Places responsibility for profits at the division level Furnishes measurable training ground for general
managers
DISADVANTAGES Requires more persons with general manager
abilities Tends to make maintenance of economical central
services difficult Presents increased problem of top management
control
Product-line managers with heavy overhead costs, allocated from the expense of operating the office, perhaps a central research division, many central service divisions.
Matrix Organisation
Matrix organisation normally is the combining of functional and product patterns of depart mentation in the same organisation structure. Matrix organisation is an overlay of engineering functions and project managers responsible for the end product. While this form has been common in engineering and in research and development.
This kind of organisation occurs frequently in construction (e.g., building a bridge), in aerospace (e.g., designing and launching a weather satellite). In marketing, installation of an electronic data processing system in which professional experts work together on a project.
MATRIX ORGANISATION IN ENGINEERING
Chief of preliminary
design
Chief mechanical
engineer
Chief electrical engineer
Chief hydraulic engineer
Chief metallurgical
engineer
DIRECTOR OF
ENGINEERING
Project A manager
Project B manager
Project C manager
Project D manager
ADVANTAGES Is oriented toward and results Professional identification is maintained Pinpoints product-profit responsibility
DISADVANTAGES Conflict in organisation authority exists Possibility of disunity of command exists Requires manager effective in human
relations
To establish responsibility for ensuring such end results
A project manager is put in charge of all the engineering and support personnel necessary to accomplish an entire project.
But pure project organisation may not be feasible for a number of reasons. For example, the project may not be able to utilise certain specialised engineering personnel or equipment full time: a solid-state physicist may be needed only occasionally or the project may need only part-time use of an expensive environmental test laboratory.
Another reason is highly trained professionals. Generally prefer to be allied organisationally with their professional group.
Use of Matrix Management
PROJECT ORGANISATION IN ENGINEERING
Preliminary design
Mechanical engineer
DIRECTOR OF
ENGINEERING
Electrical engineer
Hydraulic engineer
Metallurgical engineer
Preliminary design
Mechanical engineer
Electrical engineer
Hydraulic engineer
Metallurgical engineer
Project A manager
Project B manager
Project C manager
Project D manager
Problems with Matrix Management
A state of conflict exists between functional and project
managers, as both compete for limited resources. Members
on the project team may encounter role ambiguity.
Role conflict, role ambiguity, and role overload may result in
stress for the functional and project managers as well as for
the team members.
An imbalance of authority and power, as well as horizontal
and vertical influence of the project and functional managers
also lead to problems in matrix organisation.
Example: Functional manager has too much power, work on
a particular project may receive a low priority, thereby
delaying its completion.
Functional manager may frequently be required to change the machine setup to accommodate work on various projects.
Because of the potential conflicts, managers may want to protect themselves against blame by putting everything in writing, which increases administration costs.
Requires many time-consuming meetings
Guidelines for Making Matrix Management Effective
Define the objectives of the project or task Clarify the roles, authorities, and responsibilities
of managers and team members Ensure that influence is based on knowledge
and information, rather than on rank Balance the power of functional and project
managers Select an experienced manager for the project Undertake organisation and team development Install appropriate cost, time, and quality
controls that report deviations from standards in a timely manner
Reward project managers and team members fairly
STRATEGIC BUSINESS UNITS
They are distinct little businesses set up as units in a larger company to ensure that a certain product or product line is promoted and handled as though it were an independent business.
To be called an SBU, a business unit must meet specific criteria – have its own mission, distinct from the missions of other SBUs; have definable groups of competitors; prepare its own integrative plans, fairly distinct from those of other SBUs; manage its resources in key areas, and have a proper size – neither too large nor too small.
For each SBU a manger is appointed with responsibility for guiding and promoting the product from the research laboratory through product engineering.
TYPICAL STRATEGIC BUSINESS UNIT ORGANISATION IN A LARGE INDUSTRIAL
CHEMICAL COMPANY
GENERAL MANAGER Industrial Chemicals
Phosphates
Division personnel manager
Division purchasing manager
Division research manager
Production manager
Sales manager
Market manager Accounting
manager
Product development
manager
Works manager Atlanta
Works manager Chicago
Works manager Dallas
Regional manager
New York
Regional manager Chicago
Regional manager
Los Angeles
Product manager
A
Product manager
B
Product manager
C Positions shown in dotted lines report
administratively to the Division General Manager but are functionally responsible to the Business Manager in the area of phosphate operations
It is the oldest type of organization known by different names i.e. military vertical, scalar, or departmental organization.
Persons having the greater decision making authority are placed, at the top, and those having the least decision making authority are at the bottom.
In between, there are other levels of management such as intermediate and supervisory.
1.The lines of authority are vertical 2.There is a command relationship
between the superior and the subordinate
3.The line of authority is the chain of communication, co- ordination and delegation
4. It provides the channel of accountability in the organization
1. Simple and can be understood by everyone
2. Authority and responsibility are clearly defined
3. Facilitates quick decisions and prompt action
4. It is easy to maintain discipline5. Communication is easy and quick.
1. There is concentration of authority at the top level
2. There are too many levels of management
3. The line officers get overloaded with work and they cant devote sufficient time for planning .
Authority: Is the right to give orders and exact obedience.
Rightful legal power to request subordinates to do certain things or to retain from doing so, and if he does not follow these instructions the manager is in a position ,if need be, to take disciplinary action, even to dismiss the subordinate.
Power is the ability of individuals or groups to induce or influence the beliefs or actions of other persons or groups.
Five types of power identified John French and Betram Raven
Legitimate power of primary concern. It normally arises from position in hierarchy of the organization
Expert power come from the expertness of a person or a group. Physicians, lawyers, university professor have considerable influence on others because they are respected from their special knowledge.
Referent power personal power that someone based on identification, imitation, loyalty, or charisma.
Example: Martin Luther king by the force of his personality, his ideas, and ability to preach, he strongly influenced the behavior of many people.
Reward power is the power to give or withhold rewards, such as salary increases, bonuses, promotion ,praise, recognition, and interesting job assignments.
Example: University professors have considerable reward power ;they can grant or withhold high grades.
Coercive power to force compliance means of psychological , emotional , or physical threat coercion is limited in most organizations.
Responsibility: It means obligation,liability,or activity or accountability.
According to Koontz: It may be defined as the obligation of a subordinate, to whom a superior has assigned a task, to perform the service required.
Line functions are those that have direct impact on the accomplishment of the objectives of the enterprise.
Functional authority is the right which is delegated to an individual or a department to control specified processes, practices, policies or other matters relating to activities undertaken by persons in other departments.
Staff functions are those that help the line persons work most effectively in accomplishing the objectives.
Example: Production and sales are line functions.
Purchasing, accounting ,personnel, plant maintenance and quality control are staff functions.
Line executives have direct control over the subordinates under them.
Staff executives have no such authority. They are meant to aid and advise the line
managers at the same level.
The clearer the line of authority from the management position in an enterprise to every subordinate position ,the clearer will be the responsibility for decision making and the more effective will be organization communication.
Nature of staff relationship is advisory . Their role is to investigate, research, and
give advice to line managers. Line and staff are characterized by
relationships and not by departmental activities.
Where highly specialized knowledge is required the staffs are much helpful.
Specialists are allowed the time to think, to gather data, and to analyze whereas their superiors busy managing operations, cannot do so.
Staff help line managers to be effective. Training of young staff executives
Danger of undermining line authority. Lack of staff responsibility Thinking in a vacuum Because staff people do not implement
what they recommend, it is possible that staff may think in a vacuum.
Managerial problems Too much staff activity may complicate
a line executives job of leadership and control.
Staff managers may sometime interfere in the affairs of the line managers.
Staffs are specialists in their area and they are not well versed with the practical problems of the organization.
Line managers sometimes do not like to share with staff officers the credit of achievements.
Ambiguity about each one’s roles
Decentralization is the tendency to disperse decision making authority in an organized structure.
It is a fundamental aspect of delegation; to the extent the authority is not delegated, it is centralized.
It requires careful selection of which decisions to push down into the structure and which to hold near the top, specific policy making to guide the decision making.
1. Relieves top management of the burden of decision making
2. Encourages decision making and assumption of authority and responsibility
3. Gives manager more freedom and independence in decision making
4. Promotes establishment and use of broad controls which may increase motivation
5. Makes comparison of performance of different organizational units possible6. Facilitates setting up of profit centers7. Facilitates product diversifications8. Promotes development of general managers9. Aids in adaptation to a fast changing environmentLIMITATIONS OF DECENTRALIZATION:1.limited by the availability of qualified managers2.Involves considerable expense for training managers
3. Makes it more difficult to have a uniform policy4. Increases complexity of coordination of decentralized organizational units5. result in loss of some control by upper level managers6. limited by inadequate control techniques7. constrained by inadequate planning and control systems8. Limited by external forces
Includes withholding the authority by few persons at central points.
Definition by Louis Allen : centralization is the systematic and consistent reservation of authority at central points in the organization.
Types: Centralization of performance Departmental centralization Centralization as an aspect of
management
1. Top management can take vital decisions affecting the entire organizations
2. Having a uniform policy and coordination of all activities are possible
3. High-level people in the organization can take more effective and intelligent decisions
4. Centralization offers a more flexible base for the organizational structure
5. Crises and emergency situations can be secured
6. Duplication of effort can be avoided7. Control and communication becomes easier.
1.LIMITATIONS: Decisions are not taken by the people who face situations and problems in their area.2.Lower and middle level management will not have interest and initiative in the job.3.Top management unnecessarily has to waste a lot of time and energy on unimportant and routine matters.4.It hampers effective communication
1. Construct a diagram showing the formal organization of an enterprise or activity with which you are familiar.
1. How does this organization chart help the establishment of an environment for performance?
1. Discuss the nature of the assigned depart mentation
2. Identify one Company that use the given depart mentation and draw a rough chart on the board as an example
3. List Advantages4. List DisadvantagesLeader/one member of the group
has to present the points within three minutes
GROUPS & ASSIGNED TOPICS:
1.Product based depart mentation2.Process based depart mentation3.Matrix structure/organization4.Customer based departmentation5.Time based depart mentation6.Function based structure7.Geography/territorial depart mentation8.Strategic business units –SBU’s
DELEGATIONAccording to HENRY FAYOL- AUTHORITY is the right to give orders and power to exact obedience.Responsibility: Means obligation, liability, or activity or accountabilityAccording Koontz:It is defined as the obligation of a subordinate, to whom a superior has assigned a task, to perform the service required.
1.Delegation to go by results expected
Before assigning duties and delegating the authority to his subordinates, the manager should be clear in his mind as to what be expects from them.
2. Responsibility is Absolute Manager can delegate only authority, not
responsibility. The ultimate responsibility for the
performance of duties and exercise of delegated authority remains with him.
3.Select appropriate subordinate for delegation
4. Authority to match Responsibility and Vice Versa
Delegation can be meaningful only when it enables the subordinates to discharge his duties effectively and efficiently.
Just as an ill- equipped soldier cant fight a battle successfully, similarly and inadequate authorized subordinate cant succeed in accomplishing the assigned task.
5. Ensure unity of Command A subordinate should be commanded by
one superior only. 6. Limits to authority to be Well-
defined A manager can’t properly delegate
authority, unless he fully knows what his own authority is.
There should be written manuals and orders to indicate the limits of authority and area of operations of each manager.
7. Help the Subordinate The executive must watch the
subordinate not as a policeman, but as a friend or helper.
8. Reward effective delegation Effective delegation and successful
assumption of authority must be rewarded.
1. The determination of results expected from persons in a position.
Before assigning duties and delegating the authority the manager should be clear as to what he expects from them.
2.The assignment of tasks to persons in a position.
The activities assigned should be stated in operational terms so the subordinate knows exactly what action must be taken to perform the assigned duties.
3.The delegation of authority for accomplishing these tasks.
Subordinate must be given the right and power within the organization to accomplish the duties assigned
4.Creating the obligation for the subordinate to perform the duties assigned.
The subordinate must be aware of the responsibility to complete the duties assigned and must accept the responsibility.
1. None better than I2. A sheep in lions clothing 3. I will be exposed4. The company can’t do without me 5. I am the master 6. Why take the risk7. None of the subordinates is capable8. What if he proves better than me