UNIT 3
Organising
Q1) Explain the nature of organizing.
A1) The working connections vertical and flat relationship among people and gatherings that exist inside an association influence how its exercises are refined and facilitated. Compelling getting sorted out relies upon the dominance of a few significant ideas: work specialization, levels of leadership, authority, assignment, length of control, and centralization versus decentralization. A large number of these ideas depend on the standards created by Henri Fayol. Representatives inside every division perform just the undertakings identified with their particular capacity.
NATURE OF ORGANISING:
The main characteristics of an organizing are as follows:
1) Process: Organizing is a process undertaken to accomplish objectives. The process of organizing consists of the following steps:1) Defining goals/objectives of the organization 2) Identifying and grouping of activities 3) Defining and delegating authority and responsibility 4) Establishing relationships in the organization 5) Co-coordinating activities.
2) Goal oriented: Every organization has its own objectives and goals. Organizing is the function employed to achieve the individual goals of the employees with overall objectives of the firm.
3) Group of individual: Individuals form a group and the groups form an organization. Thus, organization is the composition of individuals and groups. Individuals are grouped into departments and their work is co-ordinate directed towards achievement of organization goals.
4) Integration: The organization divides the entire work and assigns the tasks to individuals in order to achieve the organizational objectives. Each one has to perform a different tasks of one individual must be co-ordinated with the tasks of others. Collectively these tasks at the final stage are called integration.
5) Continuity: An organization is a group of people in which they work together to achieve the goals of that organization. This relationship does not come to an end after completing the task. Organizing is a never ending process.
6) Decision Making: Top management has a right and power to take decisions. It is a task of a manager to get the things done from the subordinates in the most efficient and effective manner.
7) Common Targets: To level management set the overall goals for an organization. It is an integrated and collective effort from all the employees towards the achievement of common targets or goals setup by an organization.
8) Authority: Authority is the power to take decisions and to get the work done from the subordinates. Every manager in the organization must be given adequate authority so that he can take the right decisions to get the work done.
9) Responsibility: The manager who is provided with authority must made responsible. There must be a balance between authority and responsibility.
Q2) Explain the process of organizing.
A2) Main steps involved in the process of organizing an Organisation are: 1. Identification and Division of Work 2. Departmentalization 3. Assignment of Duties 4. Establishing Reporting Relationships.
1. Identification and Division of Work:
The process of organising starts with the identification and division of work. The whole work is to be divided into manageable activities so that duplication is avoided and work can be completed as per predetermined goals.
Division of work facilitates specialization in work and skills which are essential, as no individual can perform the entire work efficiently and effectively.
For example, the work in a bank may be divided into four simple activities Mr. Rahim looks after receiving cash, Mr. Jecob takes care of disbursing cash, Mr. Parminder gets involved in processing of loan applications and Mr. Ram ensures sanctioning of loans.
Here, work of Mr. Rahim and Mr. Jecob being similar in nature can be grouped under job of Cash Clerk while work of Mr. Parminder and Mr. Ram can be grouped under job of Loan Officer. This is how division of work in an organization can be accomplished.
2. Departmentalisation:
Departmentalisation refers to the process of grouping the activities of similar nature under same departments. This facilitates specialisation and coordination in the organisation.
Following are the various ways of departmentalisation:
(i) On the basis of functions:
Numerous activities are grouped into different departments on the basis of various functions. For example, Purchase Department for purchase functions, Finance Department for financing activities etc.
(ii) On the basis of type of products manufactured:
In this case, activities are grouped into different departments on the basis of products manufactured or produced by organisation. For example, textile division, food division etc.
(iii) On the basis of territory:
Here, activities are grouped into offices/branches on the basis of four directions (or locations) North, East, West, South (NEWS) e.g., Southern Zone, Eastern Branch etc.
3. Assignment of Duties:
Once the departments have been formed; the next step is to assign the work to the employees according to their skills and competencies. In order to ensure effective performance in an organization, it is essential that a balance is created between the nature of a job and ability of the employee responsible for that job.
4. Establishing Reporting Relationships:
Establishing responsibility relationships in an organisation structure implies the allocation of authority and responsibility among employees of the enterprise in such a way that each person should know who is responsible to whom and for what.
It is essential that there should be no disparity between authority granted and responsibility imposed. It further creates hierarchy management in which top management enjoys maximum authority and as one moves downward, the authority decreases.
This step involves providing information to the workers regarding who they will be receiving orders from and who they will be reporting to. This helps in creating hierarchy structure among various departments. Further, establishing reporting relationships facilitates coordination also amongst various departments.
For example, Sales Manager will inform about sales forecast to the General Manager who will, on the basis of that forecast, direct Production Manager to arrange production of a certain quantity within a specified period etc.
Q3) Discuss the concept and importance of Organisational Structure.
A3) A structure stands for the parts that are held together as a single whole on the basis of some relationship. In the context of strategic management, the term “structure” signifies a design that helps him to formulate and implement the strategies in an effective way.
Structure is very closely related to strategy and the environment, it is because the structure is a sub-mechanism or frame-work of relations or a sub-system that works under a supra system namely environment.
“Corporate Structure” or an “Organisational Structure” stands for the formal configuration between individuals and the group with regard to the allocation of tasks, responsibilities, and authority well within the organisation. An organisation structure is the way the tasks and sub- tasks needed to implement a strategy are arranged.
Organisation as a ‘Structure’ is the network of horizontal and vertical dimensions designed to accomplish the common objectives. It is the mechanism or the frame-work whereby people function and facilities are integrated to achieve preset goals. It is a group of people working together towards attaining the given goals.
Organizational Structure – Need and Importance
Sound organisation structure can contribute greatly to the survival continuity and stability of the enterprise.
The need and importance of organising and organisational structure can be understood more precisely on the basis of the following points:
1. Facilitates Administration:
Sound organisation helps in the performance of management functions like planning, staffing, directing and controlling. Inadequate organisation may result in duplication of work and efforts and some of the important operations may be left out. Sound organisation facilitates the performance of various managerial functions by division of labour, consistent delegation or job definition and clarity of authority and responsibility relationship.
2. Promoters Growth and Diversification:
Sound organisation designed on scientific principles can create conditions conductive to planned expansion and diversification of the activities of the enterprise. It can help in keeping the various activities under control and increase the capacity of the enterprise to undertake more activities.
3. Co-Ordination:
Organisation is an important means of bringing co-ordination among the various departments of the enterprise. It creates clear-cut relationship between the departments and helps in laying down balanced emphasis on various activities. It also provides for the channels of communication for the coordination of the activities of different departments.
4. Optimum Use of Technological Innovations:
A sound organisational structure is flexible to give adequate scope for the improvement in technology. It facilitates introducing changes in the enterprise by modifying the authority and responsibility relationship in the wake of new developments.
5. Optimum Use of Human Resources:
Sound organisation matches the jobs with the individuals and vice-versa. It ensures that every individual is placed on the job for which he is best suited. This helps in the better use of individuals working in the enterprise.
6. Stimulates Creative Thinking:
An organisational structure based on clear-cut demarcation of authority, higher range of responsibility, discretionary freedom granted to personnel, incentives offered for specialised work, etc. will certainly foster the spirit of constructive and creative thinking. Such an atmosphere will give an opportunity for the staff to display their hidden creative talents which, in turn, will lift the enterprise to achieve higher goals of business.
7. Training and Development:
An effective organisation facilitates delegation of authority which is an important device for training and developing the personnel. Delegation of authority is also an important means of directing the subordinates. It prepares them to take more responsibilities whenever need arises.
Peter Drucker has rightly remarked, “Good organisation structure does not by itself produce good performance, but a poor organisation structure makes good performance impossible, no matter how good the individual managers may be…. A good organisation structure… is not the only thing that matters in managing…. But the right organisation structure is necessary foundation; without it the best performance in all other areas of management will be ineffectual and frustrated.”
It may be noted that there is no single organisation structure that works best in all kinds of situations. While designing an organisation structure, the management must consider external environment, objectives and strategies of the enterprise, types of human resources and the nature of technology.
Q4) What are the merits and demerits of line and staff organization?
A4) Merits of Line and Staff Organization
Demerits of Line and Staff Organization
Q5) Write a note on Matrix Organisation.
A5) A matrix structure is a combination of the structural options covered in (1) and (2) above. Such structures are chosen when there is a need for more than one consideration for designing the organisational structure (for example, there is no clear-cut preference for either functional specialisation or product-market focus or geographical thrust). Normally a matrix structure reflects the need to recognise the simultaneous importance of at least two dimensions, such as, (i) product focus as well as geographical thrust, or (ii) product focus as well as functional specialisation.
While there are certain advantages of a matrix structure, there are also certain disadvantages, as can be seen from the following:
Advantages:
a. Better quality of decision making since multiple perspectives are allowed to be built-in.
b. Face-To-Face contact helps in reducing the impact of bureaucracy.
c. Improved managerial motivation and development.
Disadvantages:
i. Dilution of priority, lack of ownership.
ii. Confused/unclear job and task responsibilities.
iii. Lack of focus in cost and profit responsibilities.
iv. Potential for conflict within the teams.
If managed well, by clearly spelling out which arm of the matrix should lead, and duly supported by the right managerial mind set and competencies (for example, the managers should be capable of collaborating across the matrix and they should be comfortable to work under ambiguity), a matrix structure can deliver the desired results. It can improve the quality of decision making in situations where exclusive emphasis on one dimension (be it product, function or geographical) is likely to undermine the overall interest of the organisation.
Q6) Explain the concept and features of virtual organization.
A6) A virtual organisation is defined as an organisation that is dependent on electronic linking to complete the process of production. It can be of permanent or temporary nature and can include groups, individuals dispersed at various locations, the entire organisation or even an organisational unit. In simple terms, a virtual organisation is referred to a company with an electronic presence and one who does not have a physical existence.
It is formed informally as an alliance between two or more legal entities of independent nature. The legal definition of a company does not bound virtual organisations.
A virtual organisation is referred to as a flexible network of entities that are linked by computing technologies to share knowledge and skills. This electronic network goes beyond organisational and geographical boundaries. It is often considered a boundary-less organisation in which vertical and horizontal barriers are removed.
It takes the help of information and communication technologies to reach common or shared interest. In a virtual organisation, members accept the help of telecommuting by using internet, phone, and e-mails to undertake their work. These types of organisations exist through information technology tools as they do not have a base or geographical location.
In a virtual organisation, the vast majority of the employees work entirely online from dispersed geographical locations. It uses informatics tool to sustain, maintain and enable the sharing of resources in distributed work environments.
In today’s modern and competitive world, you will find more than enough new start-ups that are operating as virtual organisations. Even established companies are integrating them into their organisational design and also in hiring processes. As per a recent survey, virtual organisations are some of the biggest drivers of transformation, and there are considerable benefits in its formation.
Features of virtual organisation
It is the information and knowledge that makes a virtual organisation effective. Seamless web communication is necessary to keep the organisation working smoothly. Some of the salient features of a virtual organisation are as follows-
1. E-mail integration
An important notable feature of virtual organisation is the integration of SMS or Short Message Service into the e-mail. This is already an existing infrastructure that enables a company to take advantage of SMS products.
2. Technology
Times are changing and we are seeing tremendous advancements in the field of science and technology. This has transformed the traditional ways in which business entities used to operate and has replaced it with a new range of possibilities.
The computing industry, along with the telecommunication sector, has been the driving force behind the growth and development of virtual organisations. The CTI or Computer Telephony Integration is the reason for the new revolution.
3. Voice mail alert
When the SMS technology is added to the voice mail system it creates a way to receive voice mail alerts
4. Office system integration
The SMS or Short Message Service technology can enhance the new office systems or the existing systems.
5. Mobile data
Another salient feature of the virtual organisation is that it is now possible to retrieve any information anywhere in the world with the help of a mobile device network.
The laptop can be easily linked with mobile devices so that the user can remain connected to a virtual organisation from any place. Thus mobile data connections have revolutionised the way organisations are now operating.
Q7) What are the advantages and disadvantages of Virtual Organisation?
A7) Advantages of virtual organisation
There are numerous advantages of a virtual organisational structure. These are as follows-
1. Higher employee satisfaction
The traditional employee used to work from a physical set-up office space. They were happy to do a nine-to-five job and leave the office work behind afterwards. The new concept of the modern world is quite different. Employees do not want to be bound in the constraints of time. They are happy working from home with adjusted timings so that they can complete other urgent work in the meantime.
Some have small children that need to be dropped at school, some have elderly parents that need supervision, some are working housewives that cannot leave their home and this is why they choose work-from-home instead of the typical workplace.
A significant benefit of virtual organization is that it gives its employees the option of working from home. This has resulted in a happy workforce that has reported lower levels of anxiety and stress. Moreover, there are very few absentees because they are working from home and can make adjustments in their routine.
This is the reason why employee morale and ultimately, employee satisfaction is considerably higher.
2. Boost in employee efficiency
An essential advantage of virtual organisation is an increase in employee efficiency. It has been proved through surveys that the amount of work done in a virtual organisation is considerably more than what one could accomplish in a physical organisation at the same time.
Thus a virtual organisation helps in increasing the efficiency levels of an employee
3. Broader talent pool
Virtual organisation does not need its employees to come and work from a specific address. This proves beneficial for such companies as they can hire employees from any part of the world very quickly without worrying about simple facts like how to raise visa or how to manage transportation to reach the office on time.
Hiring employees remotely gives a virtual organisation access to a larger pool of talent that can belong to any demographic. This way the firms can expand their potential labour market. This helps them to hire as well as retain the best people from any part of the world
4. Overhead costs are low
Physical organisations are costly as it needs lots of cash to set them up. Rent of office space, hiring innumerable employees to handle the work in the physical store, costs of maintenance, expenses like lighting, furniture, cleaning, stationery, etc. are some of the costs that are an integral part of a physical organisation.
The benefit of creating a virtual organisation is that it is possible to minimise the operating costs to a great extent. It has been proved that these companies can save a considerable amount that they later can use for various other business purposes.
Hiring remote workers and working without a physical space will undoubtedly lower the overhead costs.
4. Improved scalability
Physical office space needs overhead costs, but a virtual organisation does not require any such expenses. The company has enough free capital to improve its growth potential and scalability. It is a proven fact that virtual organisation teams are more agile and willing to work for more hours than the employees in a typical traditional workplace
5. Improved employee retention
The employees working in a virtual organisation experience greater job satisfaction and thus are likely to stick around for a more extended period. Their salaries are competitive and they have the advantage of working from home. This is the reason why a virtual organisation shows a better rate of employee retention than a physical outlet
6. Access to new markets
Virtual organisations can tap new markets easily because they do not rely on physical space. These rely on sales teams that operate remotely and can reach out in new horizons to new customers.
7. Savings –
Virtual organisation helps to save time and travel expenses because there is simply no need to reach the workplace. The money that is saved is savings for the employee
8. Organized
Although the employees are in various geographic locations, still the virtual organisation works in an organised manner. The head of the company is in constant touch with each of the members and keeps a vigilant eye on their movements
9. Balance in life
A virtual organisation offers the employees a golden chance to accommodate and balance their professional and personal life
10. Use of experts
Business entities might some time or other need the help of an expert for a specific work. In a physical workplace, there is a process to hire an expert and it is no doubt a lengthy process as well as an expensive venture. In a virtual organisation, the expenses can be cut down smoothly as you can save on logging, travelling and downtime
11. Smooth movement
Tasks and projects are an integral part of the workplace. In a physical organisation, the shifting of employees from one project to another is a time-consuming process.
In contrast, in a virtual organisation, the team leader gives you the required information, and you can shift your base from one project to another with the help of few strokes of the keys or a single click of the mouse. It is thus very easy to move people from one project to another
12. Multitasking
It is not easy to multitask in a physical organisation until an employee is equipped to handle the responsibility because of his expertise and he is comfortable to move from one place to another for the project. In a virtual organisation, it is easy and straightforward to assign employees to concurrent and multiple teams.
13. Swift response time
In a virtual organisation, the relevant information can be accessed at a faster pace through online mediums. There is no need to find files from the storage room. This helps the company to offer a swift response so that it can quickly meet the demands of the market.
Disadvantages of virtual organisation
The disadvantages of a virtual organisational structure are as follows-
1. Lack of solidarity
In a physical space you will feel the team bonding that nudges employees to work harder for the team. This type of warmth and bonding is absent in employees working for a virtual organisation.
The workforce includes members who rarely speak face-to-face with other employees. There are video chats and use of Skype no doubt but it is not enough to create a bond that will motivate and stimulate members to build a sense of camaraderie that is an integral part of work culture.
Fewer opportunities for interactions is the reason why people do not know each other on a personal basis. There is no effort on the part of a virtual organisation to a team or various teams together that will boost solidarity amongst the members
2. Reputational risks
People are still not comfortable in dealing with companies that do not have a physical presence. They vary from remote employees, and this is why they do not take such companies seriously. If by any chance the virtual organisation runs poorly then it will have to face severe consequences in terms of reputational risk
3. Less communication
Virtual organisation has the best possible means to have an open channel that will facilitate increased communication between all the members. The fact is quite different from the assumption as the remote teams are simply not interested in passing any information as they are still unknown for each other.
It is up to the virtual organisation to keep on nudging its members for constant communication. In most cases, it is the responsibility of the company to provide tools so that proper communication can take place.
4. Compliance and security issues
A virtual organization means passing information remotely. Some data are confidential and very important. There is always a chance of breach or cyber hack, and it could result in loss of the data to a third party who could misuse it for his gain.
In some sectors like finance and health, it is too risky to opt for passing data back and forth through online mediums. This is why a virtual organisation is considered a red zone for compliance and security issues.
Q8) Differentiate between formal and informal organization.
A8) Key Differences Between Formal and Informal Organization
The difference between formal and informal organisation can be drawn clearly on the following grounds:
Conclusion
An informal organisation is just opposite of a formal organisation. The principal difference between these two is that all the members of a formal organisation follow a chain of command, which is not in the case of an informal organisation. Moreover, there exists a superior-subordinate relationship (status relationship) in the former, whereas such relationship is absent in the latter because all the members are equal (role relationship).
Q9) Explain the meaning and importance of departmentation.
A9) Koontz and O’Donnell define a department as designating – “a distinct area, division, or branch of an enterprise over which a manager has authority for the performance of specified activities”. Most enterprises are involved in producing a product or a service for the benefit of others. The latter aspect requires marketing or distribution so that the persons for whom the product or service is intended will accept it if it satisfies his needs. These activities require money or sufficient capital or finance.
Departmentation means the grouping of similar activities and employees of organisation into various departments for the purpose of facilitating administration. It implies the division of total work of an organisation into individual functions and sub functions. It is the process of division of organisation into different parts known as departments.
As per views of Koontz and O’Donnell, “departmentation is a process of dividing the large monolithic functional organisation into smell and flexible administrative units.” The process of departmentation takes place at all levels in the organisation. The chief executive groups activities into major departments such as production, finance, marketing, and personnel.
These departments operate under the control of a manager known as departmental head who report directly to the chief executive. The departmental head has adequate authority over the activities and employees working there. He is ultimately responsible for the smooth functioning of the department.
He further assign duties to their juniors, for example, the marketing manager may divide his activities on the basis of activities like advertising, marketing research, customer service and so on. At the lower level, there may be sales assistants and sales representatives etc.
Organisation involves dividing and grouping of activities to be done in an enterprise. Division of work means the identification of activities which are to be done for the achievement of organisational goals. After identifying various activities, these are grouped together on some logical basis.
Departmentation is the process of grouping various activities into separate units of departments. A department is a distinct section of the business establishment concerned with a particular group of business activities of like nature. The actual number of departments in which a business house can be divided depends upon the size of establishment and its nature.
A big business enterprise will, usually, have more departments as compared to a small one. In the words of Allen, “Departmentation is a means of dividing a large and monolithic functional organisation into smaller, flexible, administrative units.”
A department is a work group combined together for performing certain functions of similar nature. The process of division of the enterprise into different parts is broadly called departmentalization. Departmentation leads to grouping of both functions and personnel who are assigned to carry out allocated functions.
Departmentalization describes the manner in which divided tasks are combined and allocated to work groups. The impact of departmentation is a delineation of executive responsibilities and a grouping of operating activities. Grouping of activities into manageable units is necessary at all levels in the enterprise. Their work must be so coordinated as to ensure contribution to the welfare of the organisation.
The job functions of employees need to be divided among them and combined in a logical way. Workers with related functions usually share a common work area and constitute a work unit. Departmentalization is the process of dividing the work of the organisation into various units or departments.
Grouping of activities is an essential step for the efficient functioning of the organisation. It involves the combining of jobs into effective work groups and combining of groups into identifiable units.
Efficiency of work flow depends on the successful integration of various units within the organisation. Division of work and logical combination of tasks should lead to departmentalisation. A department is a work group combined together for performing certain functions of similar nature.
The process of division of the enterprise into different parts is called departmentation. Departmentation leads to grouping of both functions and personnel who are assigned to carryout allocated functions. Grouping of activities into manageable units is necessary at all levels in the enterprise.
Departmentation in Management – Importance
Departmentation is grouping of activities and employees into departments. It is division of a complex organization into smaller, flexible administrative units. It is a method of arranging activities to facilitate the accomplishment of organizational objectives.
Departmentation is essential/ important because of the following reasons:
1. Specialization:
Departmentation permits an organization to take advantage of specialization. It permits people to work in individual departments and gain experience and expertise in handling things over there. Jobs can be assigned to people who are best suited for delivering excellent results.
2. Expansion:
Organisations can cope with heavy work by simply dividing the same among a number of smaller, flexible departments. Organisations can grow only when additional departments are created to handle rush orders and specialized jobs demanding individual attention. In the absence of Departmentation, managers can control only a small group of people under their command.
3. Autonomy:
Departmentation permits people to think and act independently while working in an individual department. They have enough freedom to think and act on their own putting resources at their command to best use. When people are empowered to act in an autonomous way, they get enthused and begin to put their best foot forward.
4. Responsibility:
Departmentation helps people know their limitations. They know what to do and what not to do. They also know what they are supposed to do in order to meet targets and deadlines. When they fail to live up to expectations and go off the track it is easy to find out where things have gone wrong. Where job assignments are clear and you know who is responsible for what, accountability can be fixed fairly easily and quickly.
5. Appraisal:
The performance of people working in a department can be appraised easily against the assigned goals and targets. When they fail to deliver results, you can put the finger on the problem causing trouble. You can separate the wheat from the chaff easily.
6. Management Development:
Departmentation allows people to grow in a particular area or field. They can put in their best while working in a department fairly independently. They can put their skills, capabilities and talents to best use. Repeated operations in a micro area would help them gain mastery over the discipline. Over the years, they can also offer guidance, assistance and help to the younger executives reporting to them directly and thus, contribute to their growth.
7. Communication and Control:
Departmentation facilitates communication, coordination and control and contributes to the organizational success. Working in a department permits people to interact freely and communicate without any hurdles. They can coordinate their efforts with others in an attempt to reach goals. It becomes easy to find out where things have gone wrong, who is not able to pick up speed, how to plug the loopholes promptly. This, of course, would facilitate the control process.
Q10) What are the barriers to delegation?
A10) Barriers to delegation
Though delegation enhances efficiency of the organisation by dividing work amongst organisational members (according to their capabilities), it is not free from obstacles.
Various barriers to delegation can be grouped in three main headings.
These are:
I. Barriers related to superiors or delegator,
II. Barriers related to subordinates or delegate, and
III. Barriers related to organisation.
I. Barriers related to Superiors:
Despite knowing how important it is to delegate, superiors sometimes do not delegate work to subordinates.
This is because of the following reasons:
1. Wanting to do things personally:
Some managers do not delegate because they feel they can do the work better than others. Since ultimate responsibility is that of the delegator, they prefer doing the work themselves rather than getting it done through others. This also helps in maintaining control over the activities assigned to subordinates. The delegator enjoys doing the work and makes his importance felt in the organisation by showing his busyness in the office.
2. Insecurity:
If managers feel that subordinates perform better than them, they avoid delegation. The exposure of their inabilities to take good decisions creates a feeling of insecurity and, therefore, they fear to delegate. This happens in organisations where work procedures and methods are not sound. A weak operating system usually stops the managers from revealing their shortcomings to the subordinates.
3. Retention of power:
Some managers like to take responsibility, make their importance felt by everyone in the organisation and want the subordinates to come to them to get their problems solved. Their desire to retain power and dominate is a hindrance to the effective delegation process. Such managers are usually autocratic in nature. They abstain from delegation and prefer to direct people personally.
4. Lack of confidence in subordinates:
The reward for risk is return. Unless managers assume the risk of subordinates not performing well, they cannot contribute to the development of skilled managers in future. A manager who does not take risk in subordinates and lacks confidence in them will not be able to delegate effectively. Delegation is based on trust between superior and subordinates. Negative attitude towards subordinates obstructs delegation as superior lacks confidence in the ability of subordinates.
5. Unwillingness to set standards of control:
Having delegated the duties, managers remain accountable for overall performance of the work. They supervise the activities of subordinates to ensure that actual performance is in conformity with planned performance. A manager who fails to establish standards of control will not be able to effectively delegate to subordinates.
6. Personal factors:
Autocratic managers usually do not delegate to keep tight control over the activities of subordinates. Democratic leaders prefer to delegate as they believe in participation of employees in the decision-making process.
Managers usually follow past precedents in creating an environment friendly to delegation. If their managers delegate to them, they also trust their subordinates in making delegation effective. If their managers did not trust them in delegating the tasks, they also do not delegate the tasks further.
II. Barriers Related to Subordinates:
Subordinates present the following barriers to effective delegation:
1. Lack of confidence:
Some subordinates do not want to take responsibility for the fear of not being able to perform well. They lack confidence and do not want to take any risk. They prefer to depend on their bosses to make decisions.
2. Fear of making mistakes:
Some subordinates fear that if they make mistakes in carrying out the delegated responsibilities, their superiors will criticize them for unfavourable outcomes. This fear dissuades them from taking added responsibility.
3. Lack of incentives:
Motivation (through financial and non-financial incentives) makes delegation effective. Subordinates are reluctant to accept delegation in the absence of incentives.
4. Absence of access to resources:
If subordinates do not have access to resources (financial and non-financial) to carry out their work, they will not accept delegation of responsibilities. This happens when there is delegation of responsibility without commensurate authority.
5. Convenience:
Sometimes subordinates prefer the work is done by superiors rather than assuming responsibility for the same, for the sake of convenience. They simply want their bosses to make the decisions.
III. Barriers Related to Organisation:
The barriers related to organisation structure are as follows:
1. Size of the organisation:
A small-sized organisation will not have too many jobs to delegate to subordinates. It is, thus, not responsive to delegation of tasks.
2. No precedent of delegation:
Merely because organisations have not earlier been following the practice of delegation sometimes makes them continue with the practice of not delegating the jobs.
3. Degree of centralisation or decentralisation:
Efficient delegation is affected by the degree to which organisation distributes the decision-making power to various organisational units. A highly centralised organisation is obstructive to the process of effective delegation.
Q11) What are the principles of effective delegation?
A11) Principles of Effective Delegation
There are a few guidelines in form of principles which can be a help to the manager to process of delegation. The principles of delegation are as follows: -
According to this principle, if a subordinate is given a responsibility to perform a task, then at the same time he should be given enough independence and power to carry out that task effectively. This principle also does not provide excessive authority to the subordinate which at times can be misused by him. The authority should be given in such a way which matches the task given to him. Therefore, there should be no degree of disparity between the two.
3. Principle of absolute responsibility- This says that the authority can be delegated but responsibility cannot be delegated by managers to his subordinates which means responsibility is fixed. The manager at every level, no matter what is his authority, is always responsible to his superior for carrying out his task by delegating the powers. It does not means that he can escape from his responsibility. He will always remain responsible till the completion of task.
Every superior is responsible for the acts of their subordinates and are accountable to their superior therefore the superiors cannot pass the blame to the subordinates even if he has delegated certain powers to subordinates example if the production manager has been given a work and the machine breaks down. If repairmen is not able to get repair work done, production manager will be responsible to CEO if their production is not completed.
4. Principle of Authority level- This principle suggests that a manager should exercise his authority within the jurisdiction/framework given. The manager should be forced to consult their superiors with those matters of which the authority is not given that means before a manager takes any important decision, he should make sure that he has the authority to do that on the other hand, subordinate should also not frequently go with regards to their complaints as well as suggestions to their superior if they are not asked to do. This principle emphasizes on the degree of authority and the level upto which it has to be maintained.
Q12) What are the factors affecting decencetralisation of authority?
A12) Decentralization refers to the dispersal of decision making power to the lower level of the organization.
‘Decentralization refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central points’. – Louis A. Allen
‘When authority is dispersed decentralization is present.’ – George Terry.
In large organizations it is not always possible for all activities to be organized from the centre. Hence, a certain amount of decentralization becomes necessary.
Factors affecting decentralization of authority
1. Size– size of the organization, terms of sales number, plans, number of employees affects the decentralization of authority. It is observes that the speed and adequacy of decision making, flexibility and efficiency are enhanced through decentralization of authority in case of very large multi product, diverse and complex organization. Therefore in larger size of organization, there will be more dispersion of authority
2. History and age– the size of organization, the degree of decentralization depends upon history and ages of organization. If it is organized by an individual then in such kind of organization, there will be centralization of authority. But in case of business activities when there is merging being done there is decentralization of authority. In any organization, relatively high degree of centralized authority may be needed when new values and viewpoint are establishes by the executives
3. Philosophy of top management– decentralization of authority depends upon philosophy of top management. it is seen that in the owners managed enterprise there is delegation of authority but in professionally managed enterprise decentralization of authority is seen
4. Competent personnel– competent personnel affect decentralization of authority. more personnel at lower level more policy of decentralization of authority,
5. Strategy and organization environment– strategy and organization environment influences market, technological environment, competition. It is the basis of determining decentralization of authority and centralization of authority.
6. Nature and management function– the degree of decentralization of authority is influenced by nature and management functions. Generally functions like production and sales are more decentralized and finance, personnel, research and development are highly centralized.
7. Control techniques– decentralization of authority is more when control technique is good. When control system is reliable, there is better and higher decentralization of authority to the lower level.
8. Dispersion of organizational plans– decentralization of authority also depends upon dispersion of organizational plans of the organization. Organization has officer of different types located at different places. That’s why decentralization of authority becomes necessary.
