...AUTHORITY, DELEGATION AND DECENTRALISATION What is an authority? Authority is the cement of organisation structure in which various units of organisation are integrated. Without authority a manager cesses to be a manager. It is the authority that gives managers power to act. Authority is glue that holds organisation together. It is impossible to have an organisation unless some persons have the authority to command action of others. The word Authority is derived from the Latin word “auctoritas” meaning invention, advice, opinion, influence, or command. In English, the word 'authority' connotes power given by the state or by academic knowledge of an area (someone can be an authority on a subject) Weber defined domination (authority) as the chance of commands being obeyed by a specifiable group of people. Legitimate authority is that which is recognized as legitimate and justified by both the ruler and the ruled. Authority sometimes refers to;- 1) The Institutionalized and legal power inherent in a particular job, function, or position that is meant to enable its holder to successfully carry out his or her responsibilities. 2) An agency or body created by a government to perform a specific function, such as environment management, power generation, or tax collection is an authority. 3) Judgment of a court or judicial opinion quoted in support of a legal argument. In management field, the concept authority can be defined as:- 1. The right to guide and direct the actions...
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...Centralisation implies the concentration of authority at the top level of the organisation while decentralisation means dispersal of authority throughout the organisation According to Allen Centralisation is systematic and consistent reservation of authority at central points within an organisation. Decentralisation applies to the systematic delegation of authority in an organisation context. Advantages of Decentralisation Decentralisation reduces the workload of top executives. It improves job satisfaction and morale of lower level managers by satisfying their needs for independence, participation and status. Decision making is quicker. It facilitates growth and diversification. As each product division is given sufficient autonomy for innovation and creativity. It gives opportunity to subordinates to exercise their own judgment. They develop managerial skills which will be useful to the organisation in the longer run. Decentralisation requires wider span of control and fewer levels of organisation. It speeds up communication. Decentralisation increases the administrative expenses and each division or department has to be sufficient in terms of physical facilities and trained personnel. As each department or division enjoys substantial autonomy it might lead to co-ordination problems. There might be lack of uniformity and inconsistent procedures as each department might have the authority to formulate its own policies and procedures. Disadvantages of Decentralisation...
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...differentiation indicates the number of hierarchy levels from the ‘’top’’ to the ‘’bottom’’ and spatial dispersion refers to the spread of facilities and personnel globally within a company. The second component is formalisation, which refers to the amount of standardized jobs and procedures. A high degree of formalisation means an employee has many organisational rules to follow. Selection of employees, setting role requirements, creating rules, procedures and policies, socialisation, training and rituals are methods that can be used to promote standardisation. The third component is centralisation. The degree of centralisation defines whether decisions are made by a small number of top managers (centralisation) or divided over more people organisation-wide (decentralisation). Decentralisation is often necessary to avoid putting too much pressure on too few people. Also, decentralisation can often result in quicker and more accurate decisions. It motivates employees to be able to have a say in the decision-making and it is a good way to train lower-level managers. Coordination means integrating the objectives and activities of small units within an organisation in order to achieve organisation-wide goals in an efficient way. There are three kinds of coordination; programmed, individual and informal. There are five basic parts to any organisation. Those are the operation core, the strategic apex, the middle line, the technostructure and the support staff. Firstly...
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...Organisation structure Structure relates to a skeletal framework of activities and processes in an organisation and specifies the roles of these in achieving goals and objectives of the organisation. According to (Mullins, 2009), a good structure is highly important due to the fact that decisions on structure are primary strategic decisions which can make or break an organisation. One important aspect of a good structure is the human element. Organisation structure should be designed so as to encourage employees and increase the morale and job satisfaction of organisation members which will result to overall organisation efficiency. (Mullins, 2006) describes nine basic considerations in the design of organisation structure. The fundamental step is to define organisational objectives to enable further analysis and comparisons of other forms of structure. Clarification of objectives A clear definition of objectives is vital to provide a framework for the design of structure of an organisation. Organisation objectives provide fundamental schemes for division of labour and creation of group units and sub units. Clearly stated aims and objectives will assist in decisions on the strategy and structural dimension to employ to achieve organisational objectives. Task and element functions Certain functions must be performed in order to produce a good or service, from the development of the good or service to finance of resources used in the complete processing. These functions...
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...there might be several reasons. In this essay, I try to analyse which aspects of centralisation and decentralisation can enhance the function of a particular organisation. I set out various organisational circumstances, and then assess which types of companies are appropriate to be centralised. It has been argued that centralisation has to do with the locus of authority to make decisions affecting the organisation. It can also refer to the tools to measure the degree of centralisation ‒ how many decisions have to be referred to headquarters or to a parent organisation (Pugh et al,, 1968, p. 76)? From this point of view, centralisation can be regarded as the degree to which decision making is confined to the upper levels of the organisation. In a small organisation, decision-makers can make decisions well and efficiently; they can set goals by themselves, communicate them to the employees and properly evaluate performance, because they are able to acquire information and communicate with employees directly. In other words, centralisation can operate well in a small company, as the upper levels of the organisation are able to be aware of issues throughout the departments and can make useful decisions. On the other hand, in a large company it may be impractical for a small number of executives to be responsible for most of the decision making. Thus, in terms of size of organisation, centralisation can be more suitable for a small business than for a large one. Returning to Kooistra’s...
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...Definitions of Decentralisation According to Henry Fayol, "Everything that goes to increase the importance of the subordinate’s role is decentralisation, everything that goes to reduce it is centralisation." According to Louis Allen, "decentralisation refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central point." This definition makes it clear that even in decentralisation, delegation to the lowest levels is not complete as the basic functions in the management process are centralized. level of standardization—both within and across markets—the greater the possible level of global efficiency Globalization 3.0, major software advances have allowed an unprecedented number of people worldwide to work together with unlimited potential. Advantages / Importance of Decentralization 1. Decentralisation helps to improve the quality of decisions/decision-making at the top level management : Decentralisation of authority among other executives at all levels in the Organisation relieves the top executive of the excessive burden saving his valuable time, which he can devote to more important and long-term problems. This is bound to improve the quality of his decisions regarding such problems. 2. Decentralisation facilitates diversification of activities : It is a matter of common experience that an Organisation with departmentation on the basis of products facilitates diversification of products...
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...Henri Fayol (Istanbul, 29 July 1841 – Paris, 19 November 1925) was a French mining engineer and director of mines who developed a general theory of business administration that is often called Fayolism.[1] He and his colleagues developed this theory independently of scientific management but roughly contemporaneously. Like his contemporary, Frederick Winslow Taylor, he is widely acknowledged as a founder of modern management methods. ------------------------------------------------- Biography [edit] Fayol was born in 1841 in a suburb of Istanbul, Ottoman Empire. His father (an engineer) was appointed superintendent of works to build Galata Bridge, which bridged the Golden Horn.[1] The family returned to France in 1847, where Fayol graduated from the mining academy "École Nationale Supérieure des Mines" in Saint-Étienne in 1860. In 1860 at the age of nineteen Fayol started the mining company named "Compagnie de Commentry-Fourchambault-Decazeville" in Commentary as the mining engineer. In 1888 he became managing director, when the mine company employed over 10,000 people, and held that position over 30 years until 1918. By 1900 the company was one of the largest producers of iron and steel in France and was regarded as a vital industry.[1] Based largely on his own management experience, he developed his concept of administration. In 1916 he published these experience in the book "Administration Industrielle et Générale", at about the same time as Frederick Winslow Taylor published...
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...MGB 200 – Leading Organisations Research Paper (final assessment) 1. Introduction This research paper will present a critical analysis of the Queensland Health case study using related theories of organisational structure. This paper will also involve the use of critical thinking skills developed through the tutorial and lecture activities in MGB 200 (Leading Organisations. In further detail, organisational structure theories and research from the Queensland Health case study will be applied to identify and analyse the problem area discussed in the case study, and recommendations will be made for how to address this problem. The structure of this research paper will be expressed via reviewing the topic area of organisational structure (2.0 Literature Review), identifying/analysing the issues in the Queensland Health case study using the theoretical framework of organisational structure (3.0 Case Study), recommendations on how to improve the situation described in the case study (4.0 Recommendations) and finally a conclusion on the case study will be given (5.0 Conclusion). 2. Literature Review This section will provide a literary review on organisational structure. Four sections will be discussed in relation to the theories of organisational structure: (2.1) defining organisational structure, (2.2) types of structure, (2.3) the reasoning behind different structure types and (2.4) examples of different structures. 1. Defining Organisational Structure ...
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...NHS. In this organization the management is on high levels, a lot of bureaucracy Reference: (http://khijji.blogspot.co.uk/2014/03/tall-organizational-structures-vs-flat.html ) Flat structure- The flat structures have fewer management levels with each level controlling a broad area or group. Flat organizations focus on empowering employees. For example organizations with flat structure are Mont Rose College, Charity organizations or small companies. Centralisation and Decentralisation structures- In Centralisation and Decentralisation structures decision- making is about authority. In centralized structures need office will retain the major responsibilities and power. Conversely decentralised organisations will spread responsibilities for specific decisions across various outlets and lower level managers, including branches or units located away from head office. An example of a decentralised structure is TESCO and EBAY. Each store of TESCO has a store manager who can makes decisions in their store. Centralisation means that the Head office keeps the main responsibilities of decision-making of the organisation. Head management have the control, making decisions and using regular methods for the good of the company. For example for this structure are...
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...Chapter 10 Defining organisational structure and design Organisational structure The formal arrangement of jobs within an organisation. Organisational Structure and Design Organisational design A process involving decisions about six key elements: Work specialization Departmentalization Chain of command Span of control centralisation and decentralisation Formalization Robbins, Bergman, Stagg, Coulter: Management 4e © 2006 Pearson Education Australia Robbins, Bergman, Stagg, Coulter: Management 4e © 2006 Pearson Education Australia 2 Organisational structure Work specialisation The degree to which tasks in the organisation are divided into separate jobs with each step completed by a different person. Overspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover. Departmentalisation by type Functional Grouping jobs by functions performed Process Grouping jobs on the basis of product or customer flow Product Grouping jobs by product line Customer Grouping jobs by type of customer and needs Geographic Grouping jobs on the basis of territory or geography Robbins, Bergman, Stagg, Coulter: Management 4e © 2006 Pearson Education Australia 3 Robbins, Bergman, Stagg, Coulter: Management 4e © 2006 Pearson Education Australia 4 1 Functional departmentalisation Geographical departmentalisation • Advantages • Efficiencies from putting together similar...
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...of HRM over time, and the context in which empirical work was carried out. In this paper we focus on the context of the increasing internationalisation of firms and how this has an effect upon modern-day typologies of HR roles. We explore these roles by focusing on the way in which HRM practices come about. Especially in a MNC setting of increasing internationalisation of firms the issues of coordination, shared learning and standardisation versus leeway for adapting to the local context (customisation) are prominent. These issues present themselves both at the corporate and regional level and at the national and local (plant) level. On all these levels HR practitioners are active and find themselves amidst the interplay of both (de-)centralisation and standardisation versus customisation...
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...10.Authority, Delegation and Decentralisation AUTHORITY Meaning : Authority is the right or power assigned to an executive or a manager in order to achieve certain organizational objectives. A manager will not be able to function efficiently without proper authority. Authority is the genesis of organizational framework. Without authority, a manager ceases to be a manager, because he cannot get his policies carried out through others. Authority is one of the founding stones of formal and informal organizations. An Organization cannot survive without authority. It indicates the right and power of making decisions, giving orders and instructions to subordinates. Authority is delegated from above but must be accepted from below i.e. by the subordinates. In other words, authority flows downwards....
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...ob : organization behaiviour14 Organisation Strategy and Structure 542 The importance of strategy 543 SWOT analysis 545 Organisational goals 546 Objectives and policy 549 Dimensions of organisation structure 551 The importance of good structure 552 Levels of organisation 553 Underlying features of organisation structure 555 Division of work 557 Centralisation and decentralisation 560 Principles of organisation 561 Span of control 562 The chain of command 563 The importance of the hierarchy 564 Formal organisational relationships 566 Project teams and matrix organisation 569 Effects of a deficient organisation structure 572 Organisation charts 573 Empowerment and control 574 Synopsis 576 Review and discussion questions 577 Management in the news: A taxing merger 577 Assignments 1 and 2 578 Personal awareness and skills exercise 579 Case study: Zara: a dedicated follower of fashion 580 Notes and references 582 15 Patterns of Structure and Work Organisation 585 Variables influencing organisation structure 586 The contingency approach 586 Size of organisation 588 Technology 589 The Woodward study 589 Major dimensions of technology: the work of Perrow 593 Environment 594 The Burns and Stalker study 594 ‘Mixed’ forms of organisation structure 595 The Lawrence and Lorsch study 597 Evaluation of the contingency approach 598 Contribution of contingency theory 600 Culture as a contingent factor 601 The changing face of the workplace 603 The demand...
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...Notes on Business Organization Centralisation and Decentralisation Centralisation implies the concentration of authority at the top level of the organisation while decentralisation means dispersal of authority throughout the organisation According to Allen Centralisation is systematic and consistent reservation of authority at central points within an organisation. Decentralisation applies to the systematic delegation of authority in an organisation context. Advantages of Decentralisation * Decentralisation reduces the workload of top executives. * It improves job satisfaction and morale of lower level managers by satisfying their needs for independence, participation and status. * Decision making is quicker. * It facilitates growth and diversification. As each product division is given sufficient autonomy for innovation and creativity. * It gives opportunity to subordinates to exercise their own judgment. They develop managerial skills which will be useful to the organisation in the longer run. * Decentralisation requires wider span of control and fewer levels of organisation. It speeds up communication. * Decentralisation increases the administrative expenses and each division or department has to be sufficient in terms of physical facilities and trained personnel. * As each department or division enjoys substantial autonomy it might lead to co-ordination problems. * There might be lack of uniformity and inconsistent procedures as each...
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... Division of Work. Specialization allows the individual to build up experience, and to continuously improve his skills. Thereby he can be more productive. Authority. The right to issue commands, along with which must go the balanced responsibility for its function. Discipline. Employees must obey, but this is two-sided: employees will only obey orders if management play their part by providing good leadership. Unity of Command. Each worker should have only one boss with no other conflicting lines of command. Unity of Direction. People engaged in the same kind of activities must have the same objectives in a single plan. This is essential to ensure unity and coordination in the enterprise. Unity of command does not exist without unity of direction but does not necessarily flows from it. Subordination of individual interest (to the general interest). Management must see that the goals of the firms are always paramount. Remuneration. Payment is an important motivator although by analyzing a number of possibilities, Fayol points out that there is no such thing as a perfect system. Centralization (or Decentralization). This is a matter of degree depending on the condition of the business and the quality of its personnel. Scalar chain (Line of Authority). A hierarchy is necessary for unity of direction. But lateral communication is also fundamental, as long as superiors know that such communication is taking place. Scalar chain refers to the number...
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