4. ASSIGNMENTS Sessional Marks Compensatory assignments Classes left? Sunday class? Next few classes Project (4 groups of 7 each) 15 marks Portfolio Matrix (Chap 3) Planning stages of a new company (Chap 2,3) Departmentation (chap 6) Controls (chap 18) Mark dates, assignment to students
6. TABLE OF CONTENTS AUTHORITY AND POWER EMPOWERMENT LINE/ STAFF CONCEPTS AND FUNCTIONAL AUTHORITY DECENTRALIZATION OF AUTHORITY DELEGATION OF AUTHORITY THE ART OF DELEGATION RECENTRALIZATION OF AUTHORITY AND BALANCE AS THE KEY TO DECENTRALIZATION
8. AUTHORITY AND POWER Power: The ability of individuals or groups to induce or influence the beliefs or actions of other persons or groups Authority: The right in a position to exercise discretion in making decisions affecting others
9. AUTHORITY AND POWER Types of Power: Legitimate Power: Its the power of an individual because of the relative position and duties of the holder of the position within an organization (A govt officer, a manager, a policeman etc has legitimate power Expert Power: Its an individual’s power deriving from the skills or expertise of the person and the organization’s needs for those skills and expertise (Doctors, Lawyers, Professors, Skilled craftsmen have expert power) Referent Power: Its the power or ability of individuals to attract others and build loyalty. It’s based on the charisma and interpersonal skills of the power holder (for instance Political leaders, movie stars etc have referent power) Reward Power: This is the power that arrives from one’s ability to grant rewards (for example university professors, managers etc have reward power Coercive Power:Its the application of negative influences. It includes the ability to demote or to withhold other rewards; the power to punish (a manager can fire the staff, and withhold the rewards as well)
10. EMPOWERMENT Empowerment: Employees at all levels in the organization are given the power to make decisions without asking their superiors or permission Because they know their work better Power should be equal to responsibility It gives participation and bring loyalty It makes the processes quicker
11. LINE/ STAFF CONCEPTS AND FUCTIONAL AUTHORITY Line authority: Its the relationship in which a superior exercises direct supervision over a subordinate- an authority relationship in a direct line or steps Staff relationship: this is advisory relationship. The staff officers investigate, research and give advice to the line managers Functional authority: the right 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
12. DECENTRALIZATION OF AUTHORITY Decentralization: “The tendency to disperse decision making authority in an organized structure is termed as decentralization” Careful selection is to be made on which decisions to push down the hierarchy and which to be kept with the top Polices are to be made clear Trainings are to be done and controls are required to be placed
13. DELEGATION OF AUTHORITY The process of delegation: It involves the following four steps Determining the results expected from a position Assigning tasks to the position Delegating authority for accomplishing these tasks Holding the person in that position responsible for the accomplishment of the tasks
14. THE ART OF DELEGATION Personal attitudes towards delegation: Receptiveness Willingness to let go Willingness to allow mistakes by subordinates Willingness to trust subordinates Willingness to establish and use broad controls Overcoming Weak Delegation Define assignments and delegate authority in light of results expected Select the person in light of the job to be done Maintain open lines of communication Establish proper controls Reward effective delegation and successful assumption of authority
15. Recentralization of authority It is the centralization of authority that was once decentralized; normally not a complete reversal of decentralization, as the authority delegated is not wholly withdrawn
16. ADVANTAGES AND DISADVANTAGES OF DECENTRALIZATION Advantages: Relieves top management of some burden of decision making and forces upper level managers to let go of Encourages decision making and assumptions of authority and responsibility Gives managers more freedom and independence in decision making Promotes establishment and use of broad controls that may increase motivation Makes comparison of performance of different organizational units possible Facilitates setting up of profit centers Facilitates product diversification Promotes development of general managers Aids in adaptation of fast changing environment
17. ADVANTAGES AND DISADVANTAGES OF DECENTRALIZATION Disadvantages: Makes it more difficult to have a uniform policy Increases complexity of coordination of decentralized organizational units May result in loss of some control by upper level managers May be limited by inadequate control techniques May be constrained by inadequate planning and control systems Can be limited by the lack of qualified managers Involves considerable expenses for training managers May be limited by external forces (national labor unions, governmental controls, tax policies) May not be favored by economies of scale of some operations
