They want to run their departments or divisions independently so that they may give expression to their abilities and may be rewarded for what they are able to accomplish in their own units. It also involves creating an obligation on the part of subordinates to perform the duties assigned to them. A substantial amount of freedom is there. But it implies no subordinate managers and therefore no structured organization. Line, staff and functional Authorities: Line authority contributes directly to attain the goals of an organisation.
This is a problem of geography: a business characterized by centralized performance operates in a single location or under a single roof. Coordinating with every level of every unit is complex and time consuming. 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. If required, training facilities can be provided to increase their understanding of the work. These general benefits may include more freedom of action for individuals, more widespread opportunity for constructive individual participation, less social stratification within the business. Thus, there is greater tendency for decentralisation.
The need for decentralisation is felt when the business grows in its size which necessiates diversification of office activities. 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. Reliance on the Manager: Decentralized organization has to place undue reliance on the efficiency of the divisional managers. Centralization and Decentralization are the two types of structures, that can be found in the organization, government, management and even in purchasing. Unsuitable for Small Firms: Departmentalization is completely unsuitable for small firms as it involves high operating costs.
Conversely, Decentralization is discretionary, in the sense that top management may or may not disperse authority. Managers can, thus, focus more on strategic management. Essentiality Delegation is essential of all kinds of concerns Decentralization is a decisions function by nature. Many countries have embarked on a process to decentralize their health systems as a means to improve their responsiveness and performance. Under a specific authority, a person is given authority regarding specific function or functions. This may be a cause of stress, hence dissatisfaction. People are result-oriented as units are autonomous and frame their sub-goals that contribute to larger goals of the organisations.
Delegation of Authority : Concept of Authority : Since authority is the crux in distribution of authority. The superior has to create an obligation on the part of the subordinate to perform. So there is no competition between them as they both complete each other. Although, decentralization lacks leadership and coordination, which leads to inefficient control over the organization. This fear dissuades them from taking added responsibility. Sources from which authority originates are: the formal authority theory, the acceptance of authority theory and the competence, theory. Freedom to work can be maintained by subordinates as they are free to take decision and to implement it.
Decentralisation is extension of Delegation: There may be delegation without decentralisation, but no decentralisation is possible without delegation. They should delegate them more tasks and express trust and confidence in them. Decentralisation of authority is a fundamental phase of delegation and the extent to which authority is not delegated is called centralisation. They simply want their bosses to make the decisions. Authority is the power legitimised by organisation which empowers a manager to make decisions, to use organisational resources, and to monitor and regulate the behaviour of subordinates for the efficient performance of assigned work responsibilities. Democratic leaders prefer to delegate as they believe in participation of employees in the decision-making process. Relatively minor decisions Crisis Suitable for facing crisis or risk Corporate culture is open Geographic Dispersion Not visible Yes, freedom is allowed to local units Size and complexity of organisation Smaller the size more the centralisation Larger the size greater the degree of decentralisation Management Attitude Conservative Progressive Uniformity of Action Required Not required Differentiating between Delegation and Decentralisation: So far the student must have understood that delegation is the beginning and decentralisation is the next move in organising.
If the organization is very large, diversified or geographically dispersed, the limitations of expertise and personal resources will generally lead to decentralization of authority to the heads of these different businesses. The effectiveness of delegation depends on how clearly these questions are answered. Decentralisation helps to increase employees morale because it involves delegation. The subordinates role in the whole exercise cannot be lost sight of. Delegation involves a national government transferring responsibility for decision-making and administration of public functions to semi-autonomous public sector organizations such as hospital corporations. Top management while deciding, keeps the balance among functions and departments.
Better utilization of Management Other economies may be achieved through the better utilization of lower and middle management, greater incentive, more and improved training opportunities, insurance that some products will not be pushed at the expense of others. Written and oral Authority: When the authority is granted in writing it may be called legal or written authority. There are three major forms of administrative decentralisation: deconcentration, delegation, and devolution. Development of the Managerial Personnel As the business grows in size, it requires the services of a large number of managers and here decentralization provides a training ground for the would-be managers. But, in reality, these two terms are different and do not indicate the same meaning. In case of death, leaving the organisation, organisational growth is hampered as there is no immediate replacement.
John Child describes four factors that characterise movement of organisation from one end of the continuum to the other i. Types of Authority : 1. The services of specialists are not utilised effectively and efficiently, as they are large in numbers. Alfred Chandler found, for example, that companies operating in industries in which markets are less uncertain, production processes less dynamic technologically and competitive relationships more stable, tend to become more centralised. Unlike, decentralization is the systematic delegation of authority in an organization. Administrative decentralisation Administrative decentralisation involves redistributing authority, responsibility and financial resources for providing public services from the national government to local units of government agencies, sub national government or semi-autonomous public authorities or corporation. Some of the differences between the two are given here: 1.