EARLY MANAGEMENT THEORIES RELEVANT
TO THE MODERN WORLD
● HENRI FAYOL
● FREDERICK TAYLOR
● MAX WEBER
● LUDWIG VON BERTALANFFY
● ELTON MAYO
● DOUGLAS MCGREGOR
Management theories are the set of general rules
that guide the managers to manage an organization.
Theories are an explanation to assist employees to
effectively relate to the business goals and
implement effective means to achieve the same.
FREDERICK W. TAYLOR
SCIENTIFIC MANAGEMENT THEORY
• "One Best Way" from his time and motion studies
• Taylor is the Father of Scientific Management
Machine Model - viewed man as a means of
production (economic man model)
PRINCIPLES OF SCIENTIFIC MANAGEMENT
Four Principles of Scientific Management are:
● Time and motion study - Study the way jobs
are performed and find new ways to do
them.
● Teach, train and develop the workman with
improved methods of doing work. Codify the
new methods into rules.
● Interest of employer & employees should be
fully harmonized so as to secure mutually
understanding relations between them.
● Establish fair levels of performance and pay
a premium for higher performance.
Basic Principles of the Machine Model
• Division of labor and specialization
• Unity of command and centralization of decisionmaking
• One way authority
Narrow span of control
Concerned with optimizing effort at the shop or
operator level and therefore utilizes micro approach
HENRY FAYOL
ADMINISTRATIVE MÄNAGEMENT THEORY
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Treated administration as a process as
opposed to the prevailing practice wherein
administration is under control of specialists.
Management (FAYOL)
● Prevoyance (Forecast & Plan). Examining
the future and drawing up a plan of action.
The elements of strategy.
● To organize. Build up the structure, both
material and human, of the undertaking.
● To command. Maintain the activity among
the personnel.
● To coordinate Binding together, unifying and
harmonizing all activity and effort.
● To control. Seeing that everything occurs in
conformity with established rule and
expressed command.
MANAGEMENT FUNCTIONS
● Henri Fayol (1925), first identified the
management functions of planning,
organization, command, coordination, and
control.
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Division of work
According to this principle, the whole work
must be divided into small task or units and
instead of assigning the whole work to one
person . One task or job should be assigned
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to one person according to the capability ,
qualification and experience of the person.
When a person is performing a part of job
again and again he will become perfect and
specializes in that job and efficiency will
improve. This principle is very useful for any
ognisation be it private or public. It
enhances overall performance of an
organisation because specialists perform
consistently .
For example an orgaisation having different
departments.
Authority & Responsibility
Authority refers to the right of superiors to
get exactness from their subordinates.
Responsibility means obligation for the
performance of the job assigned.
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SUBORDINATION OF INDIVIDUAL INTERESTS
TO GENERAL INTEREST
● When at work only the matters related to the
job or duties should be focused, pursued
and thought.
● The individual interest should be given less
importance, while the general interest
should be given most importance.
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Discipline
Discipline refers to general rules, regulation
for systematic working of an organisation.
It doesn't mean only rules and regulation
but it also means developing commitment in
the employees towards organisation . It also
means obedience to organisational rules
that are necessary for functioning of an
organisation. It includes Good supervision at all level
Clear and fair agreement
Application of penalties judiciously
Employees must honor the commitment
made by them and management must meet
its promises. On one hand it enforces
orderliness and motivates on other side.
successful organization requires the
common effort of workers.
Penalties should be applied judiciously to
encourage this common effort.
UNITY OF COMMAND
Each employee has one and only one Boss
/ Commander.
In other words, a subordinate must report to
only one superior.
"Too many cooks spoil the soup."
UNITY OF DIRECTION
All activities which have the same objective
must be directed by one manager, and he
must use one plan.
Direction also means leading.
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REMUNERATION
Payments of salaries and incentive for
workers in appreciation of their service.
This policy should give maximum
satisfaction to both employer and
employees.
CENTRALIZATION
Decisions are made from the top.
SCALAR CHAIN
Scalar chain refers to the number of levels
in the hierarchy from the ultimate authority
to the lowest level in the organization.
Having a formal chain of command from top
to bottom.
The line of authority from top management
to the lowest ranks represents the scalar
chain. Communications should follow this
chain.
Order
People and material must be in suitable
place at appropriate time for maximum
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efficiency. In other words, there must be
orderliness in the organisation
Material order - arrangement of things is
called material order. It ensures proper &
fixed place for various materials, tools, and
equipments.
Social order - arrangement of people is
referred to as social order. It ensures proper
& fixed place for each employee in an
organisation.
It results in increase in productivity and
efficiency and smoothly functions without
hindrance.
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EQUITY
Equality of treatment without
indiscrimination for the gender, creed or
ethnicity.
Equity creates loyalty and devotion in the
employees.
Equity refers to kind, fair and just treatment
to employees. Employees will put their
maximum efforts only when they are treated
with kindness and justice.
STABILITY OF TENURE
● Employee should not be temporary for long
period of time.
● Employee should be made permanent so
that they do not leave the organisation.
● Employees should not be moved frequently
from one job position to another
● Once they are appointed their services
should be served
● Time is required for an employee to get
used to a new work -fayol
● Money spent on training the worker will go
waste
● Stability of job creates team spirit & a sense
of belongingness among workers
● ultimately increase the quality as well as
quantity of work
Initiative
● Workers should be encouraged to develop
and carry out their plans for improvement
Initiative means first step with self
motivation. Fayol said that employees must
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be given an opportunity to take some
initiative in making and executing a plan. so
managers must welcome the suggestion
and ideas of employees before framing plan.
Employees must be given freedom to come
ahead and use their skills to achieve
expected goal. Positive effects are Develops feeling of belongingness in
employees.
Employees achieve target on time if they
are set up with their consultation.
ESPRIT DE CORPS
Promoting team spirit will build harmony and
unity within the organization.
Loyalty, dedication and commitment.
ACTIVITIES OF MANAGEMENT
Luther Gulick (1937) expanded on Fayol's
management functions in his introduction of
the “Seven Activities of Management"
planning, organizing, staffing, directing,
coordinating, reporting, and budgeting.
ACTIVITIES OF MANAGEMENT
1. Planning determines philosophy, goals,
objectives, policies, procedures, and rules; carrying
out long- and short-range projections; determining
a fiscal course of action; and managing planned
change. (Strategic- long term, 3 yrs or more;
operational-short term, middle level management,
dean, anchored in strategic plan)
2. Organizing establishes the structure to carry out
plans, determining the most appropriate type of
patient care delivery (anong aquity ng pt, ratio of
nurse to pt), and grouping activities (organizational
structure, flat, matrix) to meet unit goals.
MANAGEMENT PROCESS
3. Staffing consist of recruiting, interviewing, hiring,
and orienting staff. Scheduling, staff development,
employee socialization, and team building.
4. Directing (commanding) consists of motivating,
managing conflict, delegating( 5 R’s-person,
circumstance, task) communicating, and facilitating
collaboration.
5. Controlling functions include performance
appraisals, fiscal accountability, quality control,
legal and ethical control, and professional and
collegial control. (Evaluation of services)
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PARTICIPATIVE MANAGEMENT
Mary Parker Follett (1926) was one of the
first theorists to suggest participative
decision making or participative
management.
Managers should have authority with, rather
than over, employees.
Resolving conflicts
The most essential work of leader is to
create more leader.
Follet practiced these principles of coordination that
helped develop her theory of management:
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Direct contact (meetings)
Early stages (everybody is important and
has task)
Reciprocal relationship
Continuous process(maintenance, channel
in everything that you do)
Main principles of Follet’s management theory:
● Conflict resolution through integration(i.e
identifying and meeting each party's
underlying and often compatible need, as
opposed to attempting to meet frequently incompatible expressed desire of each)often
results in a win situation In
● Mary parker Follett leadership theory
genuine power is not coercive (power
over )but coactive (power with ).
● True leaders, according to Follett's
theory ,"create Power power rather than
expressing personal
MAX WEBER
Bureaucratic Theory of Management
● Weber made a distinction between authority
and power. Weber believed that power
educes obedience through force or the
threat of force which induces individuals to
adhere to regulations.
● According to Max Weber, there are three
types of power in an organization
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Traditional Power
Charismatic Power
Bureaucratic Power Or Legal Power.
Features
1. Division of Labor
2. Formal Hierarchical Structure
3. Selection based on Technical Expertise
4. Management By Rules
5. Written Documents
6. Only Legal Power is Important
7. Formal and Impersonal relations
Weber’s rules
1. Organizations are impersonal and are
subject to authority
2. Organized in clearly defined hierarchy of
offices
3. Each office has area of competence
4. Office is filled by way of a free contractual
relationship and there is free selection for
the positions
5. Technical qualification is basis of selection
6. Members are remunerated by fixed salaries;
right to pensions; salary scale according to
rank; right to resign
7. Office is sole primary occupation of the
members
8. Office constitutes a career with a promotion
system
9. Official work separated from ownership of
the means of administration
10. Members subject to strict and systematic
discipline and control in the conduct of the
office.
ELTON MAYO
Behavioral Theory Of Management
● Elton Mayo's experiments showed an
increase in worker productivity was
produced by the psychological stimulus of
being singled out, involved, and made to
feel important.
● Hawthorne Effect, can be summarized as
"Employees will respond positively to any
novel change in work environment like
better illumination, clean work stations,
relocating workstations etc. Employees are
more productive because they know they
are being studied.
-two types of employee
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Developed by Dr. William Ouchi
Not necessarily an offshoot of McGregor's
Theory X/Y, Ouchi's theory blends modern
western management approaches with
Japanese management techniques
● Such as arzen are based a amerina
betteriques
Points For Management
● Theory Z focuses on increasing employee
loyalty to the company by providing a job for
life with a strong focus on the well-being of
the employee, both on and off the job
● This means stable employment, and high
employee morale and satisfaction by
creating opportunities for collaboration,
lateral job movements, and mulit-level
participation in decision-making
THEORY X & THEORY Y
Which theory is best?
THEORY X
● Authoritarian approach to leadership.
● Managers believe that workers need to be
monitored, controlled, and given financial
incentives to work.
● Managers feel that workers are lazy and
dislike work.
ADVANTAGES
● Work is supervised (monitored)
● Decision making is likely to be faster.
● Workers stay on task.
● Motivation of workers Is uncomplicated
THEORY Y
• A leadership approach where the managers feel
that workers are willing to take on responsibility.
• Managers feel that workers show initiative.
• Managers feel that workers want to work and that
they are quite creative.
ADVANTAGES
• Worker satisfaction improves.
• Workers can work on their own.
• Workers are ambitious.
• Creative workers solve problems.
• Committed workers work better.
EMPLOYEE PARTICIPATION
Theory Z
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Chris Argyris (1964), managerial
domination causes workers to become
discouraged and passive.
If self-esteem and independence needs are
not met, employees will become
discouraged and troublesome or may leave
the organization.
MANAGEMENT FUNCTIONS
According to Henry Fayol, "To manage is
to forecast and plan, to organize, to
command, & to control"
● Luther Gullick has given a keyword
'POSDCORB
○ P stands for Planning
○ O for Organizing
○ S for Staffing
○ D for Directing
○ Co for Co-ordination,
○ R for reporting
○ B for Budgeting.
But the most widely accepted are functions of
management given by KOONTZ and O'DONNEL
Planning, Organizing, Staffing, Directing and
Controlling.
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Systematic development of action
programs
Purposes
● It gives direction to the organization.
● It improves efficiency.
● It eliminates duplication of efforts.
● It concentrates resources on important
services.
● It reduces guess work.
● It improves communication and coordination
of activities
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Planning
Basic function of management
Deciding in advance (what, how and when
to do, where we are& where we want to be)
○ Future course of action
○ Determining long and short term
objectives
Precision-soul of planning
Feasibility-should be realistic in nature
CHARACTERSITIC OF PLAN
● Must involve the future
● Must involve action
● Must have organizational identification
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Manager should collate all the information
relevant to a given activity for which
planning is to made.
Should analyze past experience, current
trends and future scope.
Helps to bring the issues and problems
related to activity to light.
2. Identification of opportunities:
● The exact planning starts.
● Identify the opportunity and carry out SWOT
analysis.
● If the organization gets positive result, it
would pass on to next stage, else the
opportunity would be dropped.
Planning process
● Planning is a process which contains
number of steps within it.
● Planning process differs from organization
to organization and from objective to
objective.
● With some minor modifications, process is
applied for all types plans.
3. Objective Setting
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Represents the destination of an organization.
Objectives of an organization and various
departments are fixed.
Timeline to finish the objectives are also fixed
during this stage
4. Planning premises:
● Denotes the circumstances under which the
planning will be undertaken.
● It represents the assumptions that are to be
considered.
Strength/ weaknesses- inside
Opportunities/ threats- outside
PLANNING PROCESS:
1. Situation analysis:
5. Determining alternative course of actions
● Requires imagination, foresight and ingenuity.
● E.g. To improve productivity and organization
can focus on increasing wages or incentives
or technology investment, etc
6. Evaluation of alternatives:
● Analyzing various aspects and results of all
the alternatives.
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Involves micro analysis of all the alternatives.
7. Selection of best alternatives:
● After micro analysis, the best methodology is
preferred to accomplish the goal of an
organization.
8. Derivative plans:
● Organizations have to think about secondary
or sub plans to accomplish.
● E.g. If an organization prefers to provide
transport facilities instead of outsourcing, then
it has to think about financial burden, etc.
9. Implementation of plans:
● Communicating plan to all employees and
providing instructions.
● Deploying facilities like raw materials, man
power, machinery
● Linking implementation with reward system
and ensuring execution.
10. Follow up:
Monitoring the consequences of implementation, so
that necessary corrective actions can be to fine tune
the plan,
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STRATEGIC PLANNING
Strategic planning examines an
organization's purpose, mission, philosophy,
and goals in the context of its external
environment.
Complex organizational plans that involve a
long period (usually 3 to 10 years) are
referred to as long-range or strategic plans.
STRATEGIC PLANNING
● Planning responsibilities are different for
managers at each organizational level.
● Strategic planning
● Top-level managers, formulate long-term
strategic planning to reinforce the firm's
mission (the mission clarifies organizational
purpose
● Strategic plans are specified for a five years
period or more; but circumstances dictate
the planning
horizon.
THE TOOLS USED IN THIS PROCESS ARE:
● SWOT Analysis (Strength, Weakness,
Opportunities, Threats)
● Portfolio Analysis
● PEST Analysis (Political, Economic, Social,
Technological
● Environment)
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Porter's 5 forces Analysis (New Entrants,
Rival Sellers, Substitute Products, Buyer
Bargaining Power, Supplier Bargaining
Power)
BCG Matrix (Boston Consulting Group)
SWOT ANALYSIS
SWOT Analysis, also known as TOWS
Analysis, was developed by Albert
Humphrey at Stanford University in the
1960s and 1970s.
SWOT definitions:
● Strengths are those internal attributes that
help an organization to achieve its
objectives.
● Weaknesses are those internal attributes
that challenge an organization in achieving
its objectives.
● Opportunities are external conditions that
promote achievement of organizational
objectives.
● Threats are external conditions that
challenge or threaten the achievement of
organizational objectives.
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OPERATIONAL PLANNING
● The process which predetermines the day
to day activities of the business.
● The planning is done to support the
strategic planning to accomplish the
organizational goals.
● In this process, short run objectives of the
company are determined as well as a
means to achievé those objectives are also
discovered.
● Middle-level management performs the
function of the operational planning process.
● It includes planning of regular business
activities and operations for a short period.
THE FOLLOWING ARE THE FEATURES OF
OPERATIONAL PLANNING:
Objectives need to be clearly defined.
● Achievement of the desired result.
● The activities are to be performed as
decided
● Maintenance of quality standards.
● Measuring performance.
Features of operational planning
Objectives need to be clearly defined.
● Achievement of the desired result.
● The activities are to be performed as
decided
● Maintenance of quality standards.
● Measuring performance.
MISSION
● The mission statement is a brief statement
identifying the reason that an organization
exists.
● Itidentifies the organization's constituency
and addresses its position regarding ethics,
principles, and standards of practice.
VISION
● Vision statements are used to describe
future goals or aims of an organization.
● It conjures up a picture for all group
members of what they want to accomplish
together.
● An organization will never be greater than
the vision that guides it.
PHILOSOPHY STATEMENT
• The philosophy flows from the purpose or mission
statement and delineates the set of values and
beliefs that
Buide all actions of the organization.
• It is the basic foundation that directs all further
planning toward that mission.
• The organizational philosophy provides the basis
for developing nursing philosophies at the unit level
and for nursing service as a whole.
GOALS AND OBJECTIVES
• Goals and objectives are the ends toward which
the organization is working.
• Objectives are similar to goals in that they
motivate people to a specific end and are explicit,
measurable, observable or retrievable, and
obtainable.
GOALS:
● Goals are also called as objectives.
● Goals are desired outcomes or targets.
● They guide management decisions and
form the criteria against which the work
results are measured.
What About Goals and Objectives?
● Goals are an expected or desired outcome
of a planning process. Goals are usually
broad, general expressions of the guiding
principles and aspirations of a community.
● Objectives are precise targets that are
necessary to achieve goals. Objectives are
detailed statements of quantitatively or
qualitatively measurable results the plan
hopes to accomplish.
POLICIES AND PROCEDURES
Policies also can be implied or expressed:
● Implied policies, neither written nor
expressed verbally, have usually developed
over time and follow a precedent.
● For example, a hospital may have an
implied policy that employees should be
encouraged and supported in their activity in
community, regional, and national healthcare organizations.
● Expressed policies are delineated verbally
or in writing.
● Expressed policies may include a formal
dress code, policy for sick leave or vacation
time, and disciplinary procedures.
RULES
• Rules and regulations are plans that define
specific action or nonaction.
• Existing rules should be enforced to keep morale
from breaking down and to allow organizational
structure.
FORECASTING
• Forecasting involves trying to estimate how a
condition will be in the future.
• Takes advantage of input from others, gives
sequence in activity, and protects an organization
against undesirable changes.
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Workforce or personnel budget largest of
the budget expenditures because health
care is labor intensive.
Operating budget reflects expenses that
change in response to the volume of service,
such as the cost of electricity, repairs and
maintenance, and supplies.
Capital budgets plan for the purchase of
buildings or major equipment, which include
equipment that has a long life (usually
greater than 5 to 7 years).
MANAGEMENT PROCESS: ORGANIZING
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BUDGETING
Budgeting can help a business achieve
financial success, predict profitability,
provide a model for performance, formulate
plans g strategies, and forecast income and
expenditures.
A budget provides insight into a company's
financial posi for the near future.
Leadership and management can use
budgeting as a too control expenditures,
evaluate plans and make better decisions
when unexpected changes occur as
budgeting provides a reference and
framework for decision making.
Budgeting provides metrics to measure as
well as monitor actual business
performance in comparison with expected
business performance.
BUDGET
A budget is a financial plan that includes
estimated expenses as well as income for a
period of time.
Accuracy dictates the worth of a budget; the
more accurate the budget blueprint, the
better the institution can plan the most
efficient use of its resources.
A budget is a quantitative plan for acquiring
and using resources over a specified period.
TYPES OF BUDGET
ORGANIZING
● Organizing is the process of establishing
formal authority.
● The arranging of component parts into
functioning wholes.
● In the managerial, planning is the
determination of what is to be accomplished,
and organizing is the determination of how it
will be accomplished.
● The purpose of organizing is to coordinate
activities so that a goal can be achieved.
The terms "planning" and "organizing" are
often used synonymously
Organization
● social unit of people, systematically
structured and managed to meet a need or
to pursue collective goals on a continuing
basis.
ORGANIZATIONAL PRINCIPLES
• The principle of unity of Command
• The principle of Requisite Authority
• The Principle of Continuing Responsibility
• The Principle of Organizational Centrality
Why do we need an Organizational
Structure ?
● All Organizations have a management
structure that determines the relationships
b/w functions and positions and subdivides
and delegates roles, responsibilities and
authority to carry out defined tasks.
Organizational Structure
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It is a framework within which an
Organization arranges it's lines of
authorities and communications and
allocates rights and duties.
ORGANIZATIONAL STRUCTURE
● Formal structure, through
departmentalization and work division,
provides a framework for defining
managerial authority, responsibility, and
accountability.
● Roles and functions are defined and
systematically arranged, different people
have differing roles, and rank and hierarchy
are evident.
TYPES OF ORGANIZATIONAL STRUCTURE
● Line Organizational Structure
● Functional Organizational Structure
● Line and Staff Organizational Structure
● Matrix Organizational Structure
ORGANIZATIONAL STRUCTURE
• Informal structure is generally a naturally forming
social network of employees.
• It is the informal structure that fills in the gaps with
connections and relationships that illustrate how
employees network with one another to get work
done.
ADVANTAGES: LINE ORGANIZATION
● The line organization structure is very
simple to understand and simple to operate.
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Communication is fast and easy and
feedback can be acted upon faster
Responsibility is fixed and unified at each
level and authority and accountability are
clear-cut, hence each individual knows to
whom he is responsible and who is or in
truth responsible to him.
Since it is especially useful when the
company is small in size, it provides for
greater control and discipline in the
organization.
It makes rapid decisions and effective
coordination possible. So it is economic and
effective.
ADVANTAGES: LINE ORGANIZATION
● The people in line type of organization get
to know ea other better and tend to feel
close to each other.
● The system is capable of adjusting itself to
changing conditions for the simple reason
that each executive sole responsibility in his
own sphere.
DISADVANTAGES: LINE ORGANIZATION
● There is a tendency for line authority to
become dictatorial.
● It overloads the executive with pressing
activities so that long-range planning and
policy formulation are often neglected
● There is no provision for specialists and
specialization, which is essential for growth
and optimisation.
● Different departments may be much
interested in their self-interests, rather than
overall organizational interests and welfare.
● It is likely to encourage nepotism.
● It does not provide any means by which a
good worker may be rewarded and a bad
one punished.
Advantages of this structure may include;
● Employees grouped by skill
● Greater sense of teamwork
Disadvantages of this structure may
• Lack of communication with other departments
• Harmful competition
• Management
issues
Advantages of this structure may include:
• Focus on a single good or service
• More centralized leadership
Disadvantages of this structure may includ
•Poor integration with other divisions
•Competition between divisions
• Lack of communication between divisions
• Potential tax implications
Advantages of this structure may include:
• Fosters open dialogue
• Flexible workplace environment
Disadvantages of this structure may include
• Leadership confusion
•Conflicting leadership loyalties
•Potentially more costly
• Roles may not be clearly defined
• Potentially heavy employee workload
Advantages of this structure may
Include:
• Cost-efficient
• Fosters good communication
• Higher employee morale
• Faster decision making
Disadvantages of this structure may include:
• Potential employee conflict
• Leadership confusion
TYPES OF ORGANIZATIONAL STRUCTURE
1. Tall or Centralized Organizational Structure
2. Flat or Decentralized Organizational
Structure
Flat vs. Tall Structures
Flat structure: Small number of levels and broad
span of management at each level
- Manager must be able to delegate well
- Advantages:
• Great Job Satisfaction
• More Delegation
• Increased communication between levels of
management
• Tall Structure: Has many levels with small spans
of management
- Power is centralized on the top levels and there is
more employee control
- Advantages:
• Greater control
• Better Performance
KEY ELEMENTS OF ORGANIZATIONAL
STRUCTURE
Six key Elements
1. Work Specialization
-Division of Labor
-The Degree to which Tasks/ Activities in an
organization are divided into Separate Jobs.
-A Job is broken down in Steps and each Step is
done by a different person
2. DEPARTMENTALIZATION
● SIt is the basis of grouping the Jobs
● Ways of Classifying and Grouping Work
Activities
a. FUNCTIONAL:
○ Groups Jobs by Functions
Performed.
● It is the most popular way to GROUP
ACTIVITIES
● Can be Used in ALL types of Organizations,
Only the Functions Change to Reflect the
Organization': Activities
● It puts together Efficiencies due to similar
b. PRODUCT Departmentalization:
● Groups Jobs by the Type of Product or
Product Line.
● The major Advantage is the Increase
ACOUNTABILITY for product
PERFORMANCE
● Each Major Product Area is Placed under
the Authority of a Manager for Everything
regarding that Product
c. PROCESS
● Groups jobs on the basis of Product Flow
● Each Dept. is Specializes in ONE
SPECIFIC PHASE of PRODUCTION
● It can also be Used for processing
CUSTOMERS as well as products
d. GEOGRAPHICAL
● Groups jobs on the basis of Territory or
Geography
e. CUSTOMER
● Groups jobs on the basis of Common
Customers
● Microsoft- organized around Four Customer
Markets;Consumers, Businesses, Large
Corporations, Software Developers
3. CHAIN OF COMMAND
● Continuous line of Authority that extends
from upper organizational level to lower
levels and CLARIFIES Who Reports to
Whom.
● Authority and Unity of Command
● These concept do not have Substantial
Relevance today because of Advancements
in Information Technology and Trend toward
Empowering Employees
4. SPAN OF CONTROL
● Number of employees a manager can
Efficiently and Effectively Manage
● The Wider or Larger the Span, The more
Efficient the Organization
5.CENTRALIZATION
6.DECENTRALIZATION
● The degree to which Lower level employees
provide input or actually make decision
Centralization vs Decentralization
Centralization
• The degree to which decision making is
concentrated at a single point in the organization
• Organizations in which top managers make all the
decisions and lower-level employees simply carry
out those orders
Decentralization
• The degree to which lower-level employees
provide input or actually make decisions
• Employee Empowerment
• Increasing the decision-making discretion of
employees