Line & Staff Authority, Decentralization

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Line & Staff Authority, Decentralization

  1. 1. LINE /STAFF AUTHORITY <ul><li>Authority: The right in the position and hence the right in the person occupying the position to exercise discretion in making decisions affecting others and the performance of individuals and others. </li></ul><ul><li>Power: The ability of individuals or groups to induce or influence the beliefs or actions of other individuals or groups. </li></ul><ul><li>- The presidential Authority. </li></ul><ul><li>- The PM’s Authority. </li></ul><ul><li>- The power of a leader (ex. Mr. Vajpayee, Mrs. Sonia Gandhi) </li></ul>
  2. 2. LINE /STAFF AUTHORITY <ul><li>Bases of Power: </li></ul><ul><li>Legitimate power: Arising from position and derived from the cultural system of rights and duties / obligations. </li></ul><ul><li>Position accepted as legitimate by the public. </li></ul><ul><li>Royal positions – kings </li></ul><ul><li>Ministerial positions…….. </li></ul><ul><li>Railways TTEs </li></ul><ul><li>Traffic Police,….. </li></ul>
  3. 3. LINE /STAFF AUTHORITY <ul><li>Bases of Power: </li></ul><ul><li>Referent Power – Is that influence which persons exercise to influence others owing to one’s / their commanding respect among the public. </li></ul><ul><li>Ex: Sports persons, Cine stars </li></ul><ul><li>Reward Power: Power in granting rewards. </li></ul><ul><li>Ex: CEOs, Professors, … </li></ul><ul><li>Coercive Power: Power to punish. </li></ul><ul><li>Ex: Police authorities, Intelligence,….. </li></ul>
  4. 4. LINE /STAFF AUTHORITY <ul><li>Empowerment: The act of giving authority and power to exercise decision making without seeking powers from one’s superiors. </li></ul><ul><li>Parameters to be considered: </li></ul><ul><li>Competencies, Mutual Trust, Sincerity, Degree of acceptance by the subordinates, Integrity, Loyalty, …. </li></ul><ul><li>Power being “P” and Responsibility being “R” </li></ul><ul><li>P = R symbolizes Balanced situation, </li></ul><ul><li>P > R symbolizes Autocratic Behavior </li></ul><ul><li>P< R symbolizes Frustration leading to inefficiency. </li></ul>
  5. 5. LINE /STAFF AUTHORITY <ul><li>General Perception: </li></ul><ul><li>Line functions: Those having direct impact on the accomplishment of the organizational objectives. </li></ul><ul><li>Ex: Production, Sales, (Finance) </li></ul><ul><li>Staff functions: Those helping the line persons work more effectively in accomplishing the objectives. </li></ul><ul><li>Ex: Purchase, Design, R&D, HR, Maintenance, Service, QC,..…… </li></ul>
  6. 6. LINE /STAFF AUTHORITY <ul><li>Line Authority gives a superior a direct line of authority over his subordinate. I.e., a superior exercises direct supervision on his subordinate – an authority relationship. </li></ul><ul><li>Exists as a series of uninterrupted steps. </li></ul><ul><li>Nature of staff relationship: Advisory. </li></ul><ul><li>To investigate, research, help and advice the line managers in accomplishing organizational objectives. </li></ul><ul><li>Governor’s relationship with Ministry. </li></ul>
  7. 7. LINE /STAFF AUTHORITY <ul><li>SCALAR PRINCIPLE: </li></ul><ul><li>Speaks of authority , responsibility, reporting, decision making and communication. </li></ul><ul><li>“ Clearer the line of authority (from the ultimate management to every subordinate position) clearer will be the responsibility for decision making and more effective will be organization communication.” </li></ul>
  8. 8. LINE /STAFF AUTHORITY <ul><li>Note: </li></ul><ul><li>Line and staff are distinguished by authority relationships and not by what people do. </li></ul><ul><li>A department like R&D, DESIGNS may stand in a predominantly staff position with respect to other departments but within the department, are line relationships. </li></ul><ul><li>Ex. VP – Production – generally line function. </li></ul><ul><li>But, when he advises the CEO on co’s production policy, the relationship is staff in nature. </li></ul>
  9. 9. LINE /STAFF AUTHORITY <ul><li>FUNCTIONAL AUTHORITY: </li></ul><ul><li>The right which has been delegated to an individual or a group to control specified processes, practices, policies, procedures, or other matters related to activities undertaken by persons in other departments. </li></ul><ul><li>Ex. Company controller prescribing the system of accounting system for the entire co. </li></ul><ul><li>QC specialist establishing QC practices for the entire corporate group of cos. </li></ul>
  10. 10. LINE /STAFF AUTHORITY <ul><li>Problems with or Limitations of Staff Managers. </li></ul><ul><li>Danger of undermining Line authority. </li></ul><ul><li>Lack of staff responsibility. </li></ul><ul><li>Thinking in a vacuum. </li></ul><ul><li>Managerial Problems – Confused unity of command. </li></ul>
  11. 11. LINE /STAFF AUTHORITY <ul><li>CENTRALIZATION: </li></ul><ul><li>The act of bringing together the activities under the control of a central authority. </li></ul><ul><li>Types of Centralization: </li></ul><ul><li>Centralization by performance. – Co. operating in a single location. </li></ul><ul><li>Centralization by departments. – Central Maintenance, Central Purchase,…. </li></ul><ul><li>Centralization as an aspect of Management. – High degree of authority held at or close to the top management. – ex. LML. TATA v/s BIRLAS. </li></ul>
  12. 12. LINE /STAFF AUTHORITY <ul><li>DECENTRALIZATION: </li></ul><ul><li>More than Delegation. </li></ul><ul><li>Reflection of Management philosophy. </li></ul><ul><li>Policy making to guide decision making. </li></ul><ul><li>Selection and Training of personnel –critical. </li></ul><ul><li>Essential element of a successful managerial system. </li></ul><ul><li>Signifies readiness to accept new challenges, flexibility, globally dynamic environment. </li></ul>
  13. 13. LINE /STAFF AUTHORITY <ul><li>Delegation of authority: </li></ul><ul><li>The process of Delegation: </li></ul><ul><li>Determine the specific results expected of a position. </li></ul><ul><li>Assign the tasks to the position. </li></ul><ul><li>Delegate the necessary authority to accomplish these tasks. </li></ul><ul><li>Hold the person in that position responsible for accomplishing the tasks. </li></ul>
  14. 14. LINE /STAFF AUTHORITY <ul><li>Golden Rules of Delegation: </li></ul><ul><li>What a superior delegates is his authority and never the responsibility. </li></ul><ul><li>You may hold your subordinate responsible, still you are accountable for all the responsibility. </li></ul>
  15. 15. LINE /STAFF AUTHORITY <ul><li>Splintered Authority. </li></ul><ul><li>Wherever a problem cannot be solved without pooling the authority of two or more managers, there lies “splintered authority. </li></ul><ul><li>Ex. Joint decision by Marketing and Production departments on product mix during the times of short supplies of raw material. Managerial conferences,… </li></ul>
  16. 16. LINE /STAFF AUTHORITY <ul><li>Parameters affecting delegation: </li></ul><ul><li>Personal attitudes towards delegation. </li></ul><ul><li>Receptiveness </li></ul><ul><li>Willingness to Let Go. </li></ul><ul><li>Willingness to let others make mistakes </li></ul><ul><li>Willingness to trust subordinates. </li></ul><ul><li>Willingness to establish and use broad controls – Good Feedback mechanism </li></ul>
  17. 17. LINE /STAFF AUTHORITY <ul><li>Guidelines to overcome weak delegation. </li></ul><ul><li>Assignment of tasks and delegation of authority should be in light of the results expected. </li></ul><ul><li>Select the right person for the job to be done and not the other way. </li></ul><ul><li>Establish and sustain open and transparent communication lines. </li></ul><ul><li>Establish right methods and measures of control. </li></ul><ul><li>Develop a clear feedback mechanism. </li></ul><ul><li>Reward effective delegation and successful assumption of authority. </li></ul>
  18. 18. LINE /STAFF AUTHORITY <ul><li>MERITS OF DECENTRALIZATION </li></ul><ul><li>Relieves top management. </li></ul><ul><li>Encourages decision making </li></ul><ul><li>Develops independent thinking </li></ul><ul><li>Leads to establishing broad controls and measures. </li></ul><ul><li>High chance to increase motivation. </li></ul><ul><li>May establish profit centers. </li></ul><ul><li>Aids product diversification. </li></ul><ul><li>Helps in developing generalists. </li></ul><ul><li>Aids developing flexibility and adaptation. </li></ul>
  19. 19. LINE /STAFF AUTHORITY <ul><li>DEMERITS OF DECENTRALIZATION </li></ul><ul><li>Difficult to have a uniform policy. </li></ul><ul><li>Tough to coordinate multiple decentralized units. </li></ul><ul><li>May lead to loss of control by top management </li></ul><ul><li>Difficult in establishing control measures. </li></ul><ul><li>Short of good managerial talent is a set back. </li></ul><ul><li>Calls for expensive training of managers. </li></ul><ul><li>May not gel in few situations for certain operations under economy of scale. </li></ul>

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