Delegation and Decentralisation
Authority
Definition
Simon,
“authority be defined as the power to make decisions which guide the actions of
others.”
Henri
Fayol, “Authority is the right to give orders
and the power to extract obedience.”
Characteristics
of authority
1. Existence
of right
2. Authority
not unlimited
3. Authority
influence behaviour
4. Key
managerial job
5. Objectivity
of authority
6. Authority
can be delegated
Sources
of authority
1. Legal
or formal authority
2. Traditional
authority
3. Acceptance
theory
4. Competence
theory
5. Charismatic
authority
Responsibility
Responsibility is the obligation to do something.
It is the duty that has to perform in the organisational tasks.Authority and
responsibility are interrelated.
One can delegate authority but not
responsibility.
According to Koontz & O'Donnell, “responsibility may be defined as the
obligation of a subordinate to whom a duty has been assigned to perform a
duty.”
George
Terry defines responsibility as,
“responsibility is the obligation to carry out assigned activities to the best
of his abilities.”
Features
of responsibility
1. Can
be assigned in humans only
2. It
arises from superior - subordinate relationship
3. It
arises from the duty assigned
4. It
may be defined in terms of functions, targets or goals
5. It
is an obligation to perform the assigned task
6. Responsibility
cannot be delegated
7. Responsibility
always flows upwards
Delegation
of authority
Delegation is an administrative process of
getting things done by others. Every superior delegates the authority to
subordinates for getting a particular task done.
Definition-
According to Allen, ”the entrustment of
a part of the work or responsibility and authority to another, and the creation
of accountability for performance.”
According to O.S. Hiner, “delegation
takes place when one person gives another the right to perform work on his
behalf and in his name and the second person accepts corresponding duty or
obligation to do what is required of him.”
Characteristics
of delegation
1. Delegation
of power
2. Authority
is delegated
3. Delegator
can change authority
4. Responsibility
not delegated
5. Entire
authority cannot be delegated
6. Delegation
does not reduce authority
Elements
of delegation
1. Assignment
of responsibility
2. Grant
of authority
3. Creation
of accountability
1. Principle
of functional definition
2. Principle
of unity of command
3. Principle
of delegation by results expected
4. Principle
of absoluteness of responsibility
5. Principle
of parity of authority and responsibility
6. Authority
level principle
7. The
scalar principle
Types
of delegation
1. General
or specific delegation
2. Formal
or informal delegation
3. Lateral
delegation
4. Reserved
authority and delegated authority.
Importance
of delegation
1. Relieving
top executives
2. Improved
functioning
3. Use
of specialists
4. Helps
in employee development
5. Helps
in expansion and diversification.
Factors
influencing degree of delegation
1. Companies
history
2. Availability
of capable person
3. Importance
and costliness of decisions
4. Size
of the enterprise
5. Available
controls
6. Types
of enterprise
7. Environmental
factors
Barriers
in delegation of authority
1. Over
confidence of superiors
2. Lack
of confidence in subordinates
3. Lack
of ability in superiors
4. Lack
of proper controls
5. Lack
of proper temperament of superior
6. Inability
of subordinates
Guidelines
for making delegation effective
1. Defining
of assignments
2. Proper
selection of persons
3. Proper
communication
4. Establishing
proper controls
5. Rewards
for proper implementation
Centralisation
Centralisation may be understood as a
situation in which the ultimate authority to command and ultimate
responsibility for results is located in the hands of the top management only.
In centralisation the authority to take decisions is not delegated to lower
levels of management as it is believed that the top management or the owner of
the business is in the best position to take the correct decisions.
Centralisation is a common practice in
small businesses because the success of small business depends on on the
dynamic manager or the owner who single handedly commands He takes all the
decisions himself and entrusts only implementation to the subordinates. Centralisation is possible in small businesses because the operations are limited and the
owner or manager is able to devote personal attention to every activity of the
business and take the relevant decisions.
Factors
determining centralisation of authority
2.
Facilitating integration
3.
Promoting personal leadership
4.
Handling emergencies
Advantages
of centralisation
1.
Standardization of procedures
and systems
2.
Facilitates evaluation
3.
Economics
4.
Coordination of activities
Disadvantages of centralisation
1.
Destroys individual initiative
2.
Overburden to few
3.
Slows down the operations
4.
Distance from customers
5. No scope for specialisation
5. No scope for specialisation
Decentralization
Decentralization refers to the dispersal of
decision making power at lower levels of management. In the power to take
decisions and make policies does not lie with one person at the top what is
past on to different persons at various levels, it is called decentralization.
Definition
of decentralization
Allen, “decentralization refers to the systematic effort to delegate to
the lowest levels all authority except that which can only be exercised at the
Central points.”
McFarland, “decentralization is a situation in which ultimate authority to
command and ultimate responsibility for results is localised as far down in the
organisation as efficient management of the organisation permits.”
Characteristics
of decentralization
1.
Extension of delegation
2.
Role of subordinates increases
3.
Reduces work at top level
4.
Authority goes to
implementation level.
5.
Decentralization is a process
Factors
influencing decentralization
1.
Need to take quick decisions
2.
Reduce work of top management
3.
Importance to product or market
4.
Growth and diversification
Advantages
of decentralization
1.
Reduces burden of top
management
2.
Quick decisions
3.
Facilitates diversification
4.
Motivation of subordinates
5.
Provides product or market
emphasis
6.
Division of risk
7.
Effective control and
supervision
Disadvantages
of decentralization
1.
Lack of coordination
2.
Difficulty in control
3.
Costly
4.
Lack of able managers.
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