Orgman reviewer
Organization Theories and Principles
Importance of Organizing Function
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Specialization - organizational structure is a network of relationships in
which the work is divided into units/departments.
Well defined jobs - org structure helps in putting the right men on the right
job. Selecting people for various depts according to their qualifications, skill
and experience.
Coordination - creates clear cut relationships among positions and ensures
mutual cooperation among individuals.
Authority responsibility relationships - smooth running of an org, the
coordination between authority - responsibility is important. There should be
coordination between different relationships. Clarity should be made for
having an ultimate responsibility attached to every authority. “Authority
without responsibility leads to ineffective behavior and responsibility
without authority makes a person ineffective”
Effective administration - org structure is helpful in defining the jobs
positions. The roles to be performed by different managers are clarified.
Growth and diversification - A company’s growth is totally dependent on
how efficiently and smoothly a concern works.
Sense of security - organizational structure clarifies job positions. Roles
assigned are clear.
Scope for new changes - Where the roles and activities to be performed are
clear and every person gets independence in his work.
Principles of Organizing - organizing process can be done efficiently if the
managers have certain guidelines so that they can take decisions and can act. To
organize in an effective manner, the ff principles of organization can be used by a
manager.
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Principle of Specialization - based on qualifications, abilities and skills - which
results in effective organization
Principle of Functional Definition - duties, responsibilities, authority and
relationships of people towards each other are defined.
Principles of Span of Control / Supervision - depicts the number of employees
that can be handled and controlled effectively by a single manager.
- 2 types:
a. Wide span of control - one manager can supervise and control
effectively a large group of persons at one time.
Features:
1. Less overhead cost of supervision
2. Prompt response from the employees
3. Better Communication
4. Better Supervision
5. Better coordination
6. Suitable for repetitive jobs
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One manager can effectively and efficiently handle a large number of
subordinates at one time.
b. Narrow span of control - the work and authority is divided amongst
many subordinates and a manager doesn’t supervise a very big group
of people under him.
Features
1. Work requires tight control and supervision
2. Coordination is difficult
3. Communication gaps can come
4. Messages can be distorted
5. Specialization work can be achieved
Factors influencing span of control:
- Managerial abilities - concerns where managers are capable, qualified and
experienced, wide span of control is always helpful.
- Competence of subordinates- Where the subordinates are capable and
competent and their understanding levels are proper, the subordinates tend
to very frequently visit the superiors for solving their problems.
- Nature of work- If the work is of repetitive nature, a wide span of supervision
is more helpful. On the other hand, if work requires mental skill or
craftsmanship, tight control and supervision is required in which narrow span
is more helpful.
- Delegation of authority- When the work is delegated to lower levels in an
efficient and proper way, confusions are less and congeniality of the
environment can be maintained. In such cases, wide span of control is
suitable
- Degree of decentralization- Decentralization is done in order to achieve
specialization in which authority is shared by many people and managers at
different levels.
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Principle of Scalar Chain - chain of command/authority that flows from top to
bottom. Wastage of resources are minimized, communication is affected,
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overlapping of work is avoided and easy organization takes place. Helps
facilitate workflow in an organization which helps in achievement of effective
results.
Principle of Unity of Command - implies one subordinate = one superior
relationship. Helps in an effective combination of resources that is physical,
financial resources which helps in easy coordination - effective org.
Delegation of Authority - in order to meet targets, a manager should delegate
authority.
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Means division of authority and power downwards to the subordinate.
Entrusting someone else to do parts of your job.
Can be defined as subdivision and sub-allocation of powers to the
subordinates in order to achieve effective results.
Elements of delegation:
1. Authority - power and right of a person to use and allocate resources
efficiently, to take decisions and give orders to achieve the goals.
2. Authority must be well defined - should know what is the scope of their
authority and avoid to misultilize it.
3. Authority always flows from top to bottom - authority should be
accompanied with an equal amount of responsibility. Accountability still rests
with the person having the utmost authority.
4. Responsibility - duty of the person to complete the task assigned to him. A
person that is given responsibility must ensure that he accomplishes the
tasks assigned to him.
5. Responsibility flows from bottom to top - middle level and lower level
management holds more responsibility.
6. Accountability - means giving explanations for any variance in the actual
performance from the expectations set.
7. Accountability cannot be delegated - example:
A is given a task with sufficient authority.
A delegates the task to b and asks him to do it well. B is responsible.
The accountability still rests with A.
Top level management = most accountable
Accountability can’t be escaped.
For achieving delegation, a manager has to work in a system and has to
perform the ff:
1.
Assignment of tasks and duties - the delegator first tries to define the
task and duties to the subordinate. Clarity of duty.
2. Granting of authority - every subordinate should be given
independence to carry the task given to him by his superiors.
3. Creating responsibility and accountability - at the same time, they
should have an obligation towards the duties assigned to them.
4. Accountability arises out of responsibility and responsibility arises out
of authority. For every authority, an equal accountability is attached.
Responsibility - bottom to top
Authority - top to bottom
Authority - legal right of a person or a superior to command his
subordinates. It is attached to the position of a superior in concern. Can be
delegated by a superior to a subordinate.
Responsibility - obligation of subordinate to perform the work assigned to
him. Arises out of superior-subordinate relationship in which subordinate agrees to
carry out duty given to him. Cannot be shifted and is absolute.
Principles of Delegation - few guidelines which can be a help the manager in the
process of delegation
1.
Principle of result expected - suggests that every manager before delegating
the powers to the subordinate should be able to clearly define the goals as
well as the results expected from them. Goals and targets should be
completely and clearly defined and the standards should be notified clearly.
2. Principle of Parity of Authority and Responsibility - the manager should keep
a balance between authority and responsibility. Both should go hand in
hand.
3. Principle of Absolute Responsibility - the authority can be delegated but
responsibility cannot be delegated by managers to his subordinates which
means responsibility is fixed. The manager at every level no matter what is
his authority, is always responsible to his superior for carrying out his task by
delegating the powers.
- Every superior is responsible for the acts of their subordinates and
are accountable to their superiors therefore superiors cannot pass the
blame to the subordinates even if he has delegated certain powers.
4. Principle of Authority Level - manager should exercise his authority within
the framework given. Managers should consult their superiors with those
matters of which the authority isn’t given.