LINE/STAFF

AUTHORITY,
EMPOWERMENT, AND
DECENTRALIZATION
Authority and Power

Power : Ability of individuals / groups to influence

the beliefs or actions of other persons or groups.

Authority : The right in a position to exercise

discretion in making decisions affecting others.
 Different bases of Power:
 Legitimate Power - normally arises from position and derives from our cultural
system of rights, obligations, and duties whereby a "position" is accepted by
people as being "legitimate“
 Ex. Presidents, Traffic Police

 Expert Power – comes from your knowledge in a specific area through which

you influence others.
 Ex. Lawyers, Physicians
 Referent Power - is influence that people or groups may exercise because
people believe in them and their ideas
 Ex: Sports persons, Doctors

 Reward Power - Power in granting rewards.

 Ex: CEOs, Professors, …

 Coercive Power - Power to punish.

 Ex: Police authorities, Intelligence,
Empowerment

Empowerment means that employees,

managers, or teams at all levels in the
organization have the power to make
decisions without asking their superiors
for permission.
Line/Staff Concepts and Functional Authority

Line functions: Those having direct impact on the

accomplishment of the organizational objectives.
Ex: Production managers, marketing managers

Staff functions: Those helping the line persons work

more effectively in accomplishing the objectives.
Ex: Purchase, Design, HR,
Line/Staff Concepts and Functional Authority

 Line Authority - gives a superior a direct line of

authority over his subordinate.
 A superior exercises direct supervision on his
subordinate – an authority relationship.

 Nature of staff relationship: Advisory.

 To investigate, research, help and advice the line
managers in accomplishing organizational objectives.
Ex., Internal/External Auditor
Line/Staff Concepts and Functional Authority

 SCALAR PRINCIPLE:

 Speaks of authority , responsibility, reporting, decision

making and communication.

 “ 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.”
Line/Staff Concepts and Functional Authority

 FUNCTIONAL AUTHORITY:

 The right to delegated to an individual or a department

to control specified processes, practices, policies,
procedures, or other matters relating to activities
undertaken by persons in other departments.

 Ex. Quality Manager, Human Resources Manager

Decentralization of Authority

Decentralization is the tendency to

disperse decision making authority in
an organized structure
 Decentralization of Authority
 Different Kinds of Centralization:

The term "centralization" has several meanings:

 1. Centralization of performance pertains to geographic concentration; it

characterizes, for example, a company operating in a single location

 2. Departmental centralization refers to concentration of specialized

activities, generally in one department. For example, maintenance for a
whole plant may be carried out by a single department

 3. Centralization as an aspect of management is the tendency to restrict

delegation of decision making. A high degree of authority is held at or near
the top by managers in the organizational hierarchy
Decentralization of Authority
 Decentralization as a Philosophy and Policy
 More than Delegation.

 Reflects a philosophy of organization and management

 Policy making to guide decision making.
 Selection and Training of personnel –critical.
 Essential element of a successful managerial system.
 Signifies readiness to accept new challenges,
flexibility, globally dynamic environment.
Centralization and decentralization as tendencies

Complete centralization Complete decentralization

(no organization structure) (no organization
structure)
Delegation of authority

Delegation of authority: giving of part of

authority to lower level
Delegation of authority

 The process of delegation involves:

• Determining the results expected from a position,

• Assigning tasks to the position,
• Delegating authority for accomplishing these tasks, and
• Holding the person in that position responsible for the
accomplishment of the tasks.
Personal Attitudes toward Delegation:

 Receptiveness
 Willingness to Let go.
 Willingness to let others make mistakes
 Willingness to trust subordinates.
 Willingness to establish and use broad controls – Good
Feedback mechanism
Guides for 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
Recentralization of Authority and
Balance as the key to Decentralization

Recentralization – Centralization of authority

that was once decentralized; normally not a
complete reversal of decentralization, as the
authority delegated is not wholly withdrawn.
Advantages and limitations of decentralization:

 Advantages:

 Relieves top management of some burden of decision making and forces

upper-level managers to let go.
 Encourages decision making and assumption of authority and responsibility.

 Give 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 developing flexibility and adaptation.

Advantages and limitations of decentralization:

 Limitations:

 Makes it more difficult to have a uniform policy.

 Increase complexity of coordination of decentralized organizational units.
 May result in loss of some control by top management
 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
 May not be favored by economies of scale of some operations.