Modul

e2
ORGANI
SING

CONTENTS

 Meani
ng

 Char
act
eri
sti
cs

 Pr
ocessofor
gani
zat
ion

 Pr
inci
plesofor
gani
zi
ng

 Spanofmanagement
(meani
ngandi
mpor
tanceonl
y)

 Depar
tment
ali
zat
ion

 Commi
tt
ees–meani
ngandt
ypes

 Cent
ral
i
zat
ionv
sdecent
ral
i
zat
ionofaut
hor
it
yandr
esponsi
bil
i
ty

Meani
ng:
An or
ganizat
ion can be def
ined as a soci
alunitorhuman gr
oupi
ng del
i
ber
atel
y
st
ruct
uredforthepur
poseofat t
aini
ngspecif
icgoal
s.

Anor ganizat
ioncanalsobedef i
nedasthepr ocessofidenti
fyi
ngandgroupingofthe
wor kt o be performed,defi
ning and delegati
ng responsi
bil
i
ty and aut
horit
y and
establi
shingrelat
ionshi
psforthepurposeofenabl i
ngpeopletowor kmostef f
ecti
vel
y
togethertoachievethegoal
soft heor
ganizati
on.
 Nat
ureandchar
act
eri
sti
csofor
gani
zat
ion:
 Anorganizat
ionbasi
cal
l
yconsist
sofgr
oupofpeopl
ewhof
ormt
hedy
nami
c
humanelementoftheor
gani
zat
ion

 Organi
zat
ionhelpsi
nident
if
yingthev
ari
oust
askstheindi
vidual
shastoperfor
m
t
oachievethecommonobjectiv
esorcommonpurposeoftheorgani
zat
ion.

 I
tensur es t
o achiev
e coordi
nati
on amongstthe people worki
ng i
nv ari
ous
depart
ments ofthe organi
zati
on and ensur
es i
ntegr
ated eff
ortsto achi
eve
organi
zati
onalobj
ecti
vesorgoal
s.

 I
tdelegatesauthori
tytot
hemanagerswi
thresponsi
bil
i
tyandaccountabi
li
tyf
or
thedischargeofthei
rdut
iesandal
soamongstdif
fer
enthi
erar
chi
callevel
sinan
organizat
ion.

 I
tal
soai
desi
nachi
evi
ngf
inanci
al,
phy
sical
mat
eri
alandhumanr
esour
ces.

 Organi
zat
ionsarepartoft
helar
gerenv
ironmentandhencet
heyar
einf
luenced
bytheext
ernal
envi
ronment.

 Or
gani
zat
ionhel
psi
nther
eal
i
zat
ionoft
hepl
ansmadebyt
hemanager
s

 I
thelpsi
nnur
tur
ingandgr
owi
ngspeci
alski
l
lsandt
alent
sbyt
hev
irt
ueofdi
vi
sion
ofl
abour
.

 I
tfaci
l
iti
esseaml
esscommuni
cat
ion

Pur
poseori
mpor
tanceofor
gani
zat
ion:
Thepurposeofanyorgani
zati
onistoachi
evegoal
sforwhi
chitisfor
medwhichaimsat
achi
evi
ngcommonobj ect
ivest
hroughit
sgroupmembereffor
ts.Thepur
poseincl
udes
thef
oll
owinglogi
calcomponents

 Est
abli
shesthepat
ter
nofr
elat
ionshi
pbygi
vi
ngdut
iesandr
esponsi
bil
i
tiest
oan
i
ndiv
idualorgr
oup

 Demar
cat
est
heaut
hor
it
y,r
esponsi
bil
i
tyanddut
iesofeachi
ndi
vi
dual
orgr
oup

 Ittel
l
seachmanagerwher
ehi
saccount
abi
l
ityl
i
esand,whoal
lar
eunderhi
s
contr
ol.

 Pr
ovi
desadequat
ecommuni
cat
ion

 Coor
dinat
esori
ntegr
atesandcont
rol
stheact
ivi
ti
esofi
ndi
vi
dual
sorgr
oupst
o
 achi
evecommonobj
ect
ivesorobj
ect
ivesoft
heent
erpr
ise

Pr
ocessofOr
gani
zat
ion
Organizi
ngmeansdesi gningtheorganizat
ionstr
ucture.I
nper f
ormingtheorganizing
funct
ion,themanagerdi ffer
entiat
eandi nt
egrat
estheact i
vi
tiesofhisorganizat
ion.By
dif
fer
ent i
ationismeantt heprocessofdepartmentali
zati
onorsegment ati
onof
acti
vi
ties.Integr
ationi
sthepr ocessofachievi
ngunityofeffort
samongv ari
ous
department s.7stepsprocessofor gani
zati
onare:

1.Consi
der
ati
onofobj
ect
ives:

Thefirststepi
norganizi
ngistiknowt heobj
ecti
veofenter
pri
se.Objecti
ves
determinethevari
ousactiv
iti
eswhichneedt obeperf
ormedandt hetypeof
organizat
ionwhichneedstobebui l
tforthi
spurpose.

2.Deci
dingor
gani
zat
ional
Boundar
ies:

Aft
erconsi
derat
ionofobject
ives,nextst
epi
stodeci
dewhatt
odoi
nsi
deand
out
sideboundar
iesoforgani
zation.

3.Gr
oupi
ngofact
ivi
ti
esi
ntoDepar
tment
s:

Thenextst
epistogroupal
lcl
osel
yrel
atedandsi
mil
aract
ivi
ti
esi
nto
depar
tmentsandsecti
ons.

4.Deci
dingwhi
chdepar
tment
swi
llbet
hekeydepar
tment
:

Keydepar
tmentsaret
hosewhi
char
erender
ingkeyact
ivi
ti
esi
eessent
ial
for
ful
fi
ll
mentofgoal
s.

5.Det
ermi
ningl
evel
satwhi
chv
ari
oust
ypesofdeci
sionsar
etobemade

Aft
erdeci
dingther
elat
ivei
mpor tanceofv
ari
ousdepar
tment
s,thel
evel
satwhi
ch
var
iousmajorandminordeci
sionsaretobemademustbedetermi
ned

6.Det
ermi
ningt
hespanofmanagement
.

Thenextstept
obetakenindesi
gningastr
uctur
eistodetermi
net
henumberof
subor
dinat
eswhoshoulddir
ectl
yrepor
ttoeachexecut
ive.

7.Set
ti
ngupacoor
dinat
ionmechani
sm
 Pr
inci
plesofor
gani
sing:
I
nordert
ofacil
it
atetheachi
evementofobj
ect
ivest
hepr
inci
plesofor
gani
zat
ionl
aid
downbymanagementthi
nker
sare

1)Objectives:Theobjecti
vesoft heent
erpri
seinfl
uencetheorganizat
ionstr
ucture
and hence t he objecti
ves havet o be clearl
y def
ined.Ev ery par
toft he
organizati
onandor gani
zationasawhol eshouldbegearedt
ot hebasicobject
ive
determinedbyt heenter
prise.

2)Speci
ali
zat
ion:Effect
iveor
ganizat
ionmustpromot
especi
ali
zat
ion.Theacti
vi
ti
es
oftheenterpr
iseshoul dbedi vi
dedaccordingt
ofunct
ionsandassi gnedto
per
sonsaccordingtothei
rspecial
i
zati
on.

3)Spanofcont rol
:A managercandir
ectl
ysuper
viseonl
yal imit
ednumberof
execut
ives.Hence,i
tisnecessar
ytohav eapropernumberofsubor di
nates
answerablet
oamanager.Amaximum ofsi
xmaybeprescr
ibedforthi
spurpose.

4)Exception:This pri
ncipl
er equi
res thatorgani
zat
ion st r
ucture should be so
designedt hatmanagersarerequi
redt ogothr
oughtheexcept ionalmattersonly
.
Allther outi
nedecisi
onsshoul dbet akenbysubordi
nat es,wher easpr obl
ems
i
nv ol
vingunusualmattersandpolicydecisi
onshoul
dber eferr
edt ohigherlev
els.

5)Scal
arprincipl
e:Thisisal
soknownaschai nofcommand.Theremustbeclear
l
inesofaut hori
tyrunni
ngfrom thetoptothebott
om.Author
it
yistherightto
deci
de,directandcoordi
nate.Ev
erysubor
dinat
emustknowwhohi ssuperi
oris
andtowhom pol i
cymat tersbeyondhisownaut hor
it
ymustber ef
err
edf or
deci
sion.

6)Unit
yofcommand:Eachsubordinat
eshouldhaveonl
yonesupervisorwhose
commandhehast oobey
.Dualsubordi
nat
ionmustbeavoided,f
ori tcauses
uneasi
ness,
disor
der
,andi
ndi
sci
pli
neandunder
mini
ngofaut
horit
y.

7)Del
egation:Pr
operauthori
tyshould bedelegat
ed atthel owerlevel
soft he
or
ganizati
onal
so.Theauthor
it
ydelegatedmustbeequaltoresponsi
bil
it
yi.
e.,
the
managershoul
dhaveenoughauthorit
ytoaccompli
shthetaskassignedtohi
m.

8)Responsibil
it
y:A super i
orshould be hel
dr esponsibl
ef orthe act
s ofhi s
subordi
nates.Nosuperiorshoul
dbeall
owedt oavoidresponsi
bil
i
tybydelegat
ing
authori
tytohissubor
dinates.

9)Authori
ty:Theauthor
it
yisthet
oolbywhichamanagerisabl
etoaccompli
sht he
desir
edobjecti
ve.Hence,t
heauthor
it
yofeachmanagermustbeclear
lydef
ined.
 Theaut
hor
it
yandr
esponsi
bil
i
tymustbeco-
ext
ensi
vei
ntheor
gani
zat
ion.

10)
Eff
ici
ency:Theor
gani
zat
ionshoul
dbeabl
etoat
tai
nthemi
ssi
onandobj
ect
ives
atthemini
mum cost
.

11)
Simpli
cit
y:Theorganizat
ionstructur
eshoul
dbeassi mpl
easpossi bl
ewi
th
minimum numberofl evels.A lar
genumberofl evel
soforgani
zat
ionmean
dif
fi
cul
tyofeff
ect
ivecommuni cati
onandcoor
dinat
ion.

12)
Flexibi
li
ty:Theorganizati
onshoul
dbef l
exibl
e,shoul dbeadaptabletochangi ng
circumstances.I
tshoul dpermi
texpansi
onandr eplacementwithoutdi
slocat i
on
anddi sr
uptionofthebasicdesi
gn.Asoundor ganizati
onmustav oidcomplicated
proceduresandexcessi vecompl i
cat
ionofcont rolsot hati
tmayadapti tself
easilyandeconomi cal
lytobusi
nessandtechnicalchanges.

13)
Balance:Thereshouldber easonabl
ebalancei
nthesi
zeofvar
iousdepart
ments,
betweencent ral
i
z at
ionanddecent r
ali
zati
on,bet
weenthepri
ncipleofspanof
controlandshor tchai
nofcommandandamongal lty
pesoff act
orssuchas
human, techni
calandfinanci
al.

14)
Unit
yofdi rect
ion:Theremustbeoneobj ect
iveandoneplanforagr oupof
acti
vit
ieshavi
ngt hesameobjecti
ve.Uni
tyofdir
ect
ionf
aci
li
tat
esunif
icat
ionand
coordi
nati
onofact i
vi
ti
esatv
ar i
ouslevel
s.

15)
Personalabil
it
ies:Asorgani
zati
onisaf or
malgr
oupofpeopl
ether
eisneedfor
properselect
ion,placementandtrai
ning.Or
gani
zat
ionst
ruct
uremustensure
opti
mum useofhumanr esour
ces.

16) Accept
abi
l
ity:thest
ruct
ureoft
heor
gani
zat
ionshoul
dbeaccept
abl
eto
peopl
ewhoconsti
tuteit
.

SpanofManagement
:
 Thespanofcontrolormanagementi
ndi
catest
henumberofsubor
dinat
eswho
canbesuccessf
ull
ydir
ect
edbyasupervi
sor
.

 Iti
softenref
err
edt
oasspanofmanagement
,spanofsuper
visi
on,spanof
aut
hor
it
y .

 Managementexper
tssuggestt
hatt
hei
dealnumberofsubor
dinat
esi
sfouri
n
 caseofhigherl
evelmanagementandei
ghtt
otwel
vei
ncaseofl
owerl
evel
management.

Spanofmanagementi
simpor
tantbecauseoft
wor
easons.

 Fir
st,t
hespanofmanagementaf
fect
stheeff
ici
entut
il
izat
ionofmanager
sand
theeff
ect
iveper
for
manceoft
hesubor
dinat
es.

 I
fthespanistoowide,manager
sar
eov
erbur
denedandsubor
dinat
es
r
ecei
vel
it
tl
egui
dance.

 Ift
hespanofmanagementistoonarr
ow,t
hemanager
sar
eunder
uti
l
ized
andsubor
dinat
esar
eovercont
rol
led.

 Thesecondr easonisther
eisr
elat
ionshi
pbet
weenspanofmanagementand
organi
zat
ionstruct
ure.

 Anarr
owspanresul
tsi
ntallor
ganizati
onwi t
hmanyl evel
sofsuper
visi
on
bet
weentopmanagementandlowestor gani
zat
ionall
evel
swhichcr
eates
morecommuni
cati
onandcostproblems.

 Ontheot
herhand,awidespanfort
hesamenumberofemploy
eesresul
ts
i
nf l
atorgani
zat
ion wit
hf ewermanagementl
evel
s bet
ween top and
bot
tom.

Exampl
e

Supposeasalesmanagerhas12sal esmenr eporti

ngtohim,hisspanofmanagement
i
s12.I fhefeelsthatheisnotabl
et owor kcloselyenoughwitheachsal esmanand
decidestor
educet hespanbyaddingt hr
eeassi st
antmanagers–eacht osuper vi
se
foursal
esment henhi
sspanofmanagementi sthreeasshowni nfi
gure.Indoingso,he
hasaddedal evelofmanagementthroughwhi chcommuni cati
onbet weenhi m and
salesmenmustpassandhehasaddedt hecostoft hreeaddi
ti
onalmanagers.
Fact
orsAf
fect
ingt
heSpanofManagement

Thef
oll
owi
ngar
esomeoft
hef
act
orswhi
chi
nfl
uencet
hespanofmanagement
:

(1)Abi
li
tyofthemanager:Somemanager sar
emor
ecapabl
ethanot
her
sandhence
canhandl
ealargenumberofsubor
dinat
es.

(
2)Abil
it
yoftheempl
oyees:I
femployeesar
emorecompetent
,lessat
tent
ionf
rom t
he
manager
sisr
equir
edandalar
gerspanofmanagementcanbeused.

(
3)Ty peofwor k:I
fempl
oyeesaredoi
ngsi
milarj
obs,t
hespanofmanagementcanbe
l
arge.Ift
hei
rjobsarequi
tedi
ff
erent
,asmal
lspanmaybenecessar
y.

(
4)Geographi
clocat
ion:Ifallsubordi
natesarelocatedatthesameplacespanof
managementcanbel
arge.Ifsubordi
natesaregeographi
cal
l
ydist
ri
but
ed,alowerspan
i
sessent
ial
.

(
5)Well
-def
inedaut
hori
tyandresponsi
bil
it
y:Clear
-cutaut
hor
it
yandr
esponsi
bil
i
tyhel
ps
amanagert
osupervi
selar
genumberofsubor di
nates.

(
6)Lev elofmanagement:Thespanofmanagementi
snar
row athi
gherl
evelof
management,
andspancanbewideratl
owerl
evel
s.

(7)Economicconsi
derat
ions:Nar
rowthespan,
tal
l
eri
sthest
ruct
ureismor
eist
hecost
.
Ont heot
herhand,wi
derspanreducest
henumberofl
evel
sandcost.
 Depar
tment
ali
zat
ion
Defini
ti
on:Thehori
zont
aldif
fer
enti
ati
onoftasksoract
ivi
ti
esi
ntodi
scret
esegmentsi
s
call
eddepart
mentali
zat
ion.Depar
tmental
i
zati
onisonei mpor
tantst
epofbuil
dingan
organi
zati
on.

Ther
ear
esev
eral
basesf
ordepar
tment
ali
zat
ion:

a)Pr
ocessDepar
tment
ali
zat
ion

Two widel
yused and i
nter
nal
l
yor
ient
ed ar
rangement
sfordi
vi
ding wor
kby
pr
ocessare:

1)Busi
nessoror
gani
zat
ional
funct
ions:

Each majorfuncti
on ofent
erpr
ise i
s gr
ouped int
o depar
tment.Si
mil
arl
y
manageri
alfunct
ionssuchasplanni
ng,organi
zi
nget ccanalsobeusedas
basefordepar
tmental
i
zati
on.

Adv
ant
ages:

 Si
mpl
efor
m ofgr
oupi
ngact
ivi
ti
es

 Pr
omot
esexcel
l
encei
nper
for
mance

 Pr
omot
eseconomi
esofscal
e

Di
sadv
ant
ages:

 Fost
erssubgoal
loy
alt
ies

 Donotof
fergoodt
rai
ningf
orov
eral
ldev
elopmentofmanager
s.
 2)Technol
ogy
:

Departmental
izati
on hereisdoneon basi sofsev er
aldiscr
etestagesin
process ortechnologies i
nvol
ved in manuf
actur
e ofproducts.
Ex:cot
ton
text
il
emanuf actur
inginvol
vesginni
ng,spi
nni
ng,weavi
nganddyeing.

Adv
ant
ages:

 Ef
fi
cientuseofheav
yandcost
lyequi
pment

 Fol
l
owspr
inci
plesofspeci
ali
zat
ion

Di
sadv
ant
ages:

 Wor
ker
sfeel
lessr
esponsi
blef
orpr
oduct
s

 Donotpr
ovi
degooft
rai
ningf
ormanager
s

b)Pur
poseDepar
tment
ali
zat
ion

Fol
l
owi
ngbel
owar
etheway
sinwhi
chwor
kcanbedepar
tment
ali
zedbypupose:

1)Departmentati
onbyproduct
:Thegr
oupingofacti
vit
yonthebasi
sofproductor
productli
nesisfoll
owedinlar
gescal
eor gani
zat
ionst
hatmanufact
ureav ast
vari
etyofproduct
s.

Undert his separat

e groups ordepart
ments are cr
eated and each depart
menti s
control
ledbyamanagerwho wi llberesponsi
bleforalltheactivit
iesofthatsub
group.Each group wil
lhav eits own f
acil
it
ies r
equi
red f
ormanuf actur
e,purchase,
mar keti
ng,accounti
ngetc

Adv
ant
ages

a.I
tfocusesi
ndi
vi
dual
att
ent
iononeachpr
oductl
i
ne.

b.I
tleadstospeci
ali
zat
ionofphy
sicalf
aci
l
iti
esont
hebasi
sofpr
oduct
whi
chresul
tsi
neconomy.
 c.I
tiseasi
ert
oev
aluat
eandcompar
etheper
for
manceofv
ari
ouspr
oduct
di
vi
si
ons.

d.I
tkeepspr
obl
emsofpr
oduct
ioni
sol
atedf
rom ot
her
s

Di
sadv
ant
ages

a.Thi
sresul
tsi
ndupl
i
cat
ionofst
affandf
aci
l
iti
es.

b.Separ
atewor kf
orcei
srequi
redi
nsal
es,mar
ket
ingandf
inancer
esul
ti
ng
i
nextraexpendi
tur
e.

c.Mor
emanager
sar
erequi
red.

d.Mayr
esul
tinunderut
il
izat
ionoff
aci
l
iti
esandequi
pment
.

2)Depart
mentationbyt err
itoryorregionorlocati
on:Depar
ment at
ionbyTer ri
tor
y
i
scommoni nor ganizati
onst hatoperateoverawi degeographicalarea.The
acti
vi
ti
esofanent erpri
searedi v
idedint
oterri
tor
iesl
ikewest
ernregion,norther
n
regi
on,east
ernregion,southernregi
onetc.Theymaybef urt
herdi vi
dedintosub
regi
ons.

Example:TheI
ndianrai
l
way
sar
edepar
tment
ali
zedont
hisbasi
sli
kenor
th,
west
,sout
h,
east
ernandcentr
al.

Adv
ant
ages

a.Pl
acesr
esponsi
bil
i
tyatl
owerl
evel
s

b.Pl
acesemphasi
sonl
ocal
probl
emsandmar
ket
s

c.Ensur
esabet
tercoor
dinat
ionandcommuni
cat
ionwi
thi
nar
egi
on

d.Pr
ovi
desar
egi
onwi
secompar
isonofper
for
mance

e.Takesadv
ant
ageofeconomi
csofl
ocal
oper
ati
ons

Di
sadv
ant
ages

a.Requi
resmor
eper
sonswi
thGener
alManagerabi
l
iti
es

b.Requi
ret
omai
ntai
nsi
mil
arf
unct
ional
peopl
eatal
lregi
ons

c.Di
ff
icul
ttocont
rol
from t
opmanagement
 3)Depar
tment
ati
onbasedont
ime

Thi
sf or
m ofdepart
mentati
onisusual
lyusedi
nthel
owerl
evel
sofanor
gani
zat
ion
whereacti
vi
ti
esar
egroupedbasedonti
me.

Theuseofshi
fti
scommoni
nsomeor
gani
zat
ionsduet
oeconomi
calort
echnol
ogi
cal
reasons.

Exampl
e:Hospi
tal
s,f
ir
edepar
tment
,secur
it
yet
c

Adv
ant
ages

 Ser
vicecanbepr
ovi
dedbey
ondt
henor
mal
wor
kinghour
s.

 Expensi
vecapi
tal
equi
pmentcanbebet
terut
il
ized

 Pr
ovi
despar
tti
mej
obsespeci
all
yforst
udent
s

 Hi
gherandcont
inuouspr
oduct
ionperday

Di
sadv
ant
ages

 Lacksgoodandef
fi
cientsuper
visi
ondur
ingni
ghthour
s

 Inconv
eni
entf
orpeopl
etowor
kint
heni
ghtshi
ft
sandmor
edi
ff
icul
tdur
ingshi
ft
changesf
rom dayt
oni
ght

 Lackofeffect
ivecoor
dinat
ionandcommuni
cat
ionf
rom peopl
eofoneshi
ftt
o
nextshi
ft

 Eventhoughproducti
vi
tyofempl
oyeesar
elessdur
ingni
ghtshi
ftmor
epay
ment
hastobegivenforthem

4)Depar
tment
aionbasesdoncust
omer
s

An ent erpr
ise may be di v
ided i
nto numberofdepar t
ments on basi
s of
customer st hatitservi
ces.Ex:Educationalinst
it
uti
ons mayhave separ
ate
departmentsf orday,eveni
ngandcorrespondencecoursestoi
mparteducati
on
tofull
-timest udent
s,l
ocall
yemployedstudentsetc
 Adv
ant
ages:

 Ensures f
ullat
tenti
on t
o maj orcustomergroups whi
ch hav
eav
ery
di
ffer
entsetofcri
ter
iagover
ningthei
rdeci
sionst
opurchase

Di
sadv
ant
ages:

 Dupl
i
cat
ionoff
aci
l
iti
es

 Under
uti
l
izat
ionofr
esour
cesandf
aci
l
iti
esi
nsomedepar
tment
s.

5)Di
vi
sion

When lar
ge,mul
ti
productcompaniessegmentthemselv
esintoindependent
pr
ofi
tcenter
sonbasisofproduct
,ter
ri
tor
yorcustomer,t
heseuni
tsarecalled
di
vi
sions.

Commi
tt
ees:
Acommit
teeisagroupofpeopl
ewhohavebeenf
ormal
l
yassi
gnedsomet
askorsome
pr
obl
em f
orthei
rdeci
sionandi
mplement
ati
on.

Pr
inci
plesofacommi
tt
ee

 Thenumberofper
sonsi
nacommi
tt
eeshoul
ddependuponneed(
about5t
o10
per
sons)

 Responsi
bil
i
ty,aut
hor
it
y,obj
ect
ives,dut
iesoft
hecommi
tt
eeshoul
dbecl
ear
ly
defi
ned.

 Agendaofthecommit
teeshoul
dbepr
oposedt
othecommi
tt
eeatl
eastaweek
bef
oretheymeetf
ordi
scussi
ons.

 Probl
emswhichcanbetakencar
ebyani
ndi
vi
dualshoul
dnotbei
ncl
udedi
nthe
agendaoft
hecommitt
ee.

 Commi
tt
eemeet
ingshoul
dbegi
nandendonpr
efi
xedt
imi
ngs.

 The recommendati
ons made by t
he commi
tt
ee shoul
d be publ
i
shed and
ci
rcul
atedtoconcer
nedper
sons.

 Thecommi
tt
ee shoul
d be appr
aised,i
fthe act
ion i
staken based upon i
ts
 r
ecommendat
ion.

 Acommi
tt
eei
sdi
ssol
vedaf
teri
tspur
posei
sov
er.

Ty
pesofCommi
tt
ees

1)Advi
sorycommi t
tees:Thesecommi
tt
eesarevest
edwithstaf
fauthor
it
y.They
onl
yhavear ecommendat i
onrol
eandcannotenf
orcei
mplement
ationofthei
r
adv
iceorrecommendat ion.

Exampl
es ofadvi
sory commi t
tees for
med i
n business ent
erpr
ises:wor
ks
commit
tees,
sal
escommi t
tees,
financecommi
tt
eesetc.

2)Executi
vecommi tt
ees:Theyv estedwit
hthelineofaut
hori
ty.Theynotonl
ytake
deci
sionsbutalsoenforcedecisionsandthusperf
orm adoublerol
eoftaki
nga
deci
sionandorderi
ngitsexecution.

Exampl
e:Boar
dofdi
rect
orsi
sanexampl
eofanexecut
ivecommi
tt
ee.

Execut
ivecommi
tt
eesaref
urt
hercl
assi
fi
edasst
andi
ngcommi
tt
eesorad-
hocor
temporar
ycommit
tee.

(i
)Standi
ngcommi
tt
ees:Ar
efor
medt
odealwi
thcur
rentor
gani
zat
ional
problem.

Exampl
e:f
inancecommi
tt
eei
nacompany
,loanappr
ovalcommi
tt
eei
na
banket
c.

Member
soft
hiscommi
tt
eear
echosenbecauseoft
hei
rti
tl
eorposi
ti
on,
i
nst
eadof

i
ndi
vi
dual
qual
i
ficat
ionsorski
l
ls.

(i
i)Ad-hoccommi tt
ees:Haveashortdur
ati
on,di
ssol
vedaft
ert
het
askis
over,
ort heprobl
em i
ssolvedandt
hemember sarechosenf
ort
hei
rski
l
ls
andexper i
ence.

3)Joi
ntConsul
tat
ive commi
tt
ee:Thi
s commi
tt
ee consi
stsr
epr
esent
ati
ves of
 l
abour
sandmanagement.Thispromotesbet
terrel
ati
onbet
weenmanagement
andl
abourbydi
scussi
ngmat
tersofcommoninter
est.

Adv
ant
ages:

a.Peopl
egetanopport
uni
tytobet
terunder
standeachot
her
’spr
obl
emsand
movetowar
dsorgani
zat
ional
goals.

b.Provideaforum forthepoolingofknowl
edgeandexperi
enceofmany
persons of di
ff
erentskill
s,ages and backgr
ounds whi
ch hel
ps i
n
i
mpr ovingt
hequali
tyofdeci
sions.

c.Pr
ovideanoppor
tuni
tyt
omanyper
sonst
opar
ti
cipat
edeci
sion-
maki
ng
pr
ocess.

d.Areexcel
l
entmeansoft
ransmi
tt
ingi
nfor
mat
ionandi
deas,bot
hupwar
d
anddownward

e.Cont
ri
but
eindi
rect
lyt
othei
rtr
aini
ngandv
iewpoi
nts.

f
. Arei
mpersonali
nactionandhencet
hei
rdecisi
onsaregeneral
l
yunbi
ased
andarebasedonf actsandther
eisnofearofsingl
eindi
vi
dualt
aki
nga
deci
si
on.

Weaknesses:

a.Commi t
teeoperat
ionsar
esl
ow andcommi
tt
eest
endt
ohangonf
ora
consi
derabl
eti
me.

b.Ifwrongdecisi
ont aken,nomembercanbeindi
vi
dual
l
ybl amedwhi
ch
encouragesi
rr
esponsibi
li
tyamongmember
soft
hecommitt
ee.

c.Canbeexpensi
veform ofadmi
nist
rat
ionwher
ehugeamounti
sspenton
conv
eni
ngmeetingsandgivi
ngal
lowancest
othemember
s.

d.Membersoft
hecoordi
nat
ingcommit
teesf
eelappoi
ntedt
oprotectthei
r
i
nter
est
softhedepart
mentsrat
hert
hanfi
ndi
ngappropri
atesol
uti
ont o
t
heprobl
em.

e.Decisi
onsaregener al
l
ybasedonsomecompr omiseamongmember
s
whicharenotbestdeci
sionswhi
chr
esul
tsi
nlogr
oll
i
ng.

f
. Consi
stsofl
argenumberofper
sons,
dif
fi
cul
ttomai
ntai
nsecr
ecy
.
 g.Ther
eisaf
earofdomi
nat
ingbyasi
ngl
eper
son

CENTRALI
ZATI
ONVSDECENTRALI
ZATI
ON

 Centr
ali
zat
ion refer
st o sy
stemat
icr
eser
vat
ion ofaut
hor
it
yatcent
ralpoi
nts
wit
hintheorganizat
ion.

 Cent
ral
izat
ion means concent
rat
ion of manager
ial aut
hor
it
yin f
ew key
manageri
alposi
ti
onsi
.e.
,att
hetoplevel
.

 Cent
ral
i
zat
ionr
educest
hesubor
dinat
e’sr
olei
ndeci
sionmaki
ng.

 Decent r
ali
zati
onmeansdisper
salofdecisi
on-
makingpowertol
owerlev
elsofthe
organizati
on.I
ndecentral
i
zedsetup,ul
ti
mateauthor
it
ytocommandandul t
imate
responsibi
li
tyfort
heresul
tsi
slocali
zedasfardownintheor
gani
zat
ion.

 I
ndecentr
ali
zedorgani
sat
ionsl
argenumberofdeci
sion,i
mpor
tantdeci
sionsi
n
l
argenumberofar
easaremadeconsult
ingf
ewpeopl
e.

InthewordsofHenr
yFayol,“Ever
ythi
ngthatgoestoincr
easetheimport
anceof
subor
dinat
esr
olei
sdecent
ral
izat
ionandev
er y
thi
ngthatr
educesi
tiscent
ral
i
zati
on”

Decent
ral
izat
ionofaut
hor
it
y:
Meaning:Thedel
egationofauthor
it
ybyani ndiv
idualmanageriscloselyr
elatedtoand
organi
zati
onsdecentr
ali
zati
onofauthor
it
y .Managementhast odeci detheamountof
decisi
on-
makingauthori
tyshoul
dbecentrali
zedint hehandsofthechiefexecuti
veand
theamounttobedistr
ibutedamongthem atlowerlevel
s

Thegr
eat
ert
hedecent
ral
i
zat
ion

1)Thegr
eat
eri
sthenumberofdeci
sionsmadeatt
hel
owerl
evel
s.

2)Thegr
eat
erar
ethei
mpor
tantdeci
sionsmadeatt
hel
owerl
evel
s.

4)Thefewerarethepeopl
etobeconsul
tedatt
helowerl
evelandl
esseri
sthechecki
ng
requi
redonthedeci
sionsmadeatt
helowerl
evel
s.

Di
sti
nct
ionbet
weendel
egat
ionanddecent
ral
izat
ion
 Del
egat
ion Decent
ral
izat
ion

i
sapr
ocess,whi
chr
efer
stot
hegr
ant
ing i
s the end r
esul
t of del
egat
ion and
of di
sper
salof

aut
hor
it
yandt
hecr
eat
ionofr
esponsi
bil
i
ty aut
hor
it
y

bet
weenonei
ndi
vi
dual
toanot
her

super
iorcontinuestober esponsi
blef
or the super i
or i s reli
eved from hi s
the responsi
bil
it
yf orthe workdecentr
ali
zed
andthesubordinate
workdelegat
et ohi
ssubor
dinates
becomesl i
ablefort
hat

vit
alandessent i
alinthemanagement i
s opti
onaland may or may not be
processandonl ythroughdelegat
ion pr
act
icedasasy
stemat
icpol
i
cy
subordinatescanbei nvol
vedinthe
organizati
onandmanagementcanget
thi
ngsdone

Adv
ant
agesofdecent
ral
izat
ion:

a.I
teasest
hebur
denoft
opl
evel
manager
s.

b.Decent
ral
i
zat
ionper
mit
squi
ckerandbet
terdeci
sionmaki
ng.

c.Wi
thdecent
ral
i
zat
ioncapabl
emanager
scanbedev
eloped

d.Pr
omotes par
ti
cipat
ion i
n deci
sion maki
ng and i
mpr
oves mor
ale and
moti
vat
ion.

e.Decent
ral
i
zat
ionf
aci
l
itat
esdi
ver
sif
icat
ionofpr
oduct
s.

Di
sadv
ant
agesofdecent
ral
izat
ion:

a.I
tincr
easesadmi
nist
rat
iveexpenses.

b.I
tmaycr
eat
epr
obl
emsi
nbr
ingi
ngcoor
dinat
ionamongv
ari
ousuni
ts.
 c.I
tmaybr i
ng abouti
nconsi
stenci
esinthecompany
,becauseuni
for
m
pr
oceduresmaynotbef oll
owedf ort
hesametypeofworkinvar
ious
di
vi
sions.

Responsi
bil
it
y:
Responsi
bil
it
yist
heobli
gat
ionthesubordi
natetoobeythesecommands.Whenev
era
super
iorassi
gnsataskt
ohi
m, i
tist
heresponsibi
l
ityoft
hesubor
dinat
etoper
for
mit.

I
thastwodimensi
ons.Fi
rstdi
mensi
oni
sther
esponsi
bil
i
tyf
orandseconddi
mensi
oni
s
t
heresponsi
bil
i
tyt
o

1)Responsibi
l
ityfor
:Istheobl
i
gat
ionofaper
sont
oper
for
m cer
tai
ndut
iesi
njob
descr
ipt
ionoraccept
edbyhim

2)Responsi
bil
i
tyto:ishi
saccount
abi
l
ityt
osuper
ior
sandassoci
atedwi
thcheckup,
super
visi
on,
contr
olandpuni
shment

Responsibi
li
ty cannotbe del
egat
ed ort ransf
erred.The super
iorcan del
egat
eto
subordi
natetheauthori
tyt
operf
orm andaccomplishaspeci
ficj
ob

DELEGATI
ONOFAUTHORI
TY
Amanageri nanent erpri
secannotdoallt
hetasksnecessaryfortheaccompli
shment
ofgroupgoal s.Het her
eforeassi
gnssamepar tofhi
swor ktohi ssubordi
natesand
grant
st hem necessaryauthor
it
ytomakedeci si
onswithintheareaoft hei
rassi
gned
duti
es.Thisdownwar dpushingofauthor
it
ytomakedeci si
onsisknownasdel egati
on
ofauthori
ty.

Bydel egat
ing aut
hori
ty,a managerdoesnotsur renderhisauthori
tyorgivethi
s
authori
tyaway .Thedel
egatingmanageralway
sret
ainst heov
eral
lauthori
tywhi
chwas
assignedtohimt oper
form hisf
unct
ions.

Thef
oll
owi
ngar
etheadv
ant
agesofdel
egat
ionofaut
hor
it
y.

a.I
trel
i
evest
hemanagerofhi
sheav
ywor
kload.

b.I
tleadstobett
erdeci
sion.Thi
sisbecause,
thesubordi
nat
esareclosestt
o
t
hesi t
uat
ionandhavet hebestv
iewofthefact
s,areinbet
terposi
ti
onsto
makedecisi
on.

c.I
tspeedsupdeci
sion-
maki
ng.
 d.I
thel
pst
otr
aint
hesubor
dinat
esandbui
l
dsmor
al.

e.I
thel
pst
ocr
eat
efor
mal
organi
zat
ionst
ruct
ure.

Di
ff
icul
ti
esi
ndel
egat
ion

Alt
houghdel
egat
ioni
sasi
mpl
epr
ocess,whi
l
epr
act
ici
ngi
tcer
tai
ndi
ff
icul
ti
escr
opup.
Theyare

1)Ont
hepar
toft
heboss

i
.“Icandoi
tbet
termy
sel
f”f
eel
i
ng.

i
i
.Fearofl
ossofpower

i
i
i.Lackofconf
idenceandt
rusti
nsubor
dinat
es

i
v.Fearofbei
ngexposed

v
.Di
ff
icul
tyi
nbr
ief
ing

v
i.I
nabi
l
ityt
oest
abl
i
shandexer
cisepr
opercont
rol
s

2)Onpar
toft
hesubor
dinat
es

i
.Ov
erdependenceonbossf
oedeci
sions

i
i
.Fearofcr
it
ici
sm

i
i
i.Lackofi
nfor
mat
ionandr
esour
cest
odoapar
ti
cul
arj
obef
fect
ivel
y

i
v.Lackofsel
fconf
idence

v
.Inadequat
eposi
ti
vei
ncent
ives