DISTINGUISHING FEATURES - Management Hotel

Delegation is a process of assigning authority from a superior to his subordinates. On the other hand, decentralisation is an organisational process by which dispersal of authority takes place throughout the organisation.

Delegation is a process of devolution of authority whereas decentralisation is the end-result of the process of delegation. In delegation, immediate superior has control over the subordinates whereas in decentralisation, top managers have overall control and operating control vests with the subordinates. Delegation is a must for management and key to organisation. Without delegation managers cannot get the things done effectively. On the other hand, decentralisation is optional. Top managers may or may not decentralise their authority.

In the case of delegation of authority, both the superior and the subordinate can exercise the same authority. But in the case of decentralisation, superior cannot exercise the decentralised authority.

In the case of delegation, the superior continues to be responsible for the decisions and actions of his subordinates. But in the case of decentralisation, subordinates become liable for their decisions and actions to the top managers.

Delegation is not dependent on decentralisation. It can take place even without decentralisation. But decentralisation cannot take place without delegation.

In delegation, degree of autonomy to subordinates is regulated by the superior. But in the case of decentralisation, the organisational departments are granted a semi -autonomous status.

Delegation is regarded as a technique whereas decentralisation is considered to be a philosophy of management and organisation.

Delegation is simply the process of assigning authority to subordinates in order to get things done through them. On the other hand, decentralisation is more than assigning authority to subordinates. It is both dispersal and concentration of authority within the organisation.

Delegation establishes superior and subordinate relationship. On the other hand, decentralisation establishes relationships between organisational departments or levels.

Delegation is a task specific and ceases as soon the task is over. Thus, it has a shorter life span. Decentralisation is an ongoing process in the organisation.

The main advantages of decentralisation of authority are as follows :

Decentralisation of authority reduces the workload of top mangers as they are free from the routine operational decision-making work. They can devote their time on more important work of strategic planning, policy formulation and so on.

It facilitates quick decisions as the decisions can be made on the spot without consulting higher level managers.

Decisions are likely to be better because they are made by the persons closest to situation. Moreover, decisions are likely to be adapted to local conditions.

Decentralisation improves organisation’s communication system. It is due to the fewer levels of authority and lesser distance between the points of information generation and the points of action.

It facilitates training and development of managers at middle and lower levels in the organisation. It is because managers at these levels are allowed to make decisions and take actions independently. In this process they develop many skills and talent.

Decentralisation pro motes democratic atmosphere in the organisation because of dispersal of authority throughout the organisation.

Decentralisation enables subordinates to exercise their own judgment and initiative which promote job satisfaction. This ultimately improves motivation and morale of subordinates.

The greater the degree of decentralisation, the more effective is the supervision and control. Under decentralisation, lower level managers have full authority as regards operation of activities. They can change work assignment or production schedules, or can recommend promotion of the subordinates and can take disciplinary action wherever necessary. It facilitates effective supervision. Control can also be made effective by evaluating the performance of each unit in the light of predetermined standards.

Decentralisation provides flexibility to meet changing needs at local levels.

Decentralisation contributes to survival and growth of organisation. It is so because it creates multiple managerial centres to cope with diverse and unique situations of the organisational environment.

Following are some of the disadvantages associated with decentralisation of authority:

Decentralisation creates semi-autonomous departments in the organisation. In such an organisation structure, there is a damage that top management may lose its control over the functioning of different departments.

Decentralisation may create problems in bringing coordination among the different departments of the organisation. Uniformity of decisions and actions may be lacking in decentralised organisation. It is because of lack of uniform policies and procedures of different departments.

Decentralisation of authority is likely to increase cost of administration and operation. It is mostly due to the duplication of activities, highly paid middle and lower level managers etc.

Sometimes, decentralisation may not be advantageous for external limitations. Growing competition, increasing complexities and uncertainties, rising cost of materials and services and so on are some of the external limitations that hampers the tendency of decentralisation.

It is very difficult to strike a balance between the degrees of centralisation and decentralisation. Operating functional departments demands more autonomy whereas top managers want to retain control more and more. This situation may lead conflicts between the two levels of managers.

Decentralisation may lead to unnecessary unfair competition among the decentralised departments. They may compete with each other in the market. They may even compete for a higher share of resources and facilities in the organisation.

Following are the important factors that determine the degree of decentralisation of authority in an organisation.

The size and complexity of an organisation is the strongest single factor determining the degree of decentralisation. Usually, the larger the organisation, more authority needs to be decentralised. Similarly, multi-product organisation having varying kinds of customers and varied marketing channels is likely to be highly decentralised.

An organisation which has grown gradually under the leadership of a particular person, is likely to be more centralised. On the other hand, organisation which has grown by acquisitions and mergers, is likely to be more decentralised. Thus, the history of organisation growth also decides the degree of decentralisation.

Where the top management believes in democratic values and participative management, there will be higher degree of decentralisation. Conversely the opposite i.e. centralisation.

Where the competent managers are available at middle and lower levels in the organisation, there tends to be decentralisation of authority. But the shortage of competent managers would limit decentralisation.

Not only the abilities but willingness of subordinates also have a bearing on the degree of decentralisation. Where subordinates are willing to assume responsibility, the organisation is likely to be more decentralised.

In a geographically dispersed organisation, operations are carried out at different locations. More the geographical dispersion, more the degree of decentralisation is beneficial. But every function should not be decentralised. Control of operational functions may be pushed down to lower levels in the organisation but control of financing function should be centralised.

As a general rule, the more the significant decision is to be made, it is likely to be made at the upper levels of the organisation. Therefore, the decisions which are vital to the survival and success of the organisation are centralised. For instance, the decisions involving huge investments and high risk, affecting long-term standing and good will of the organisation are made by the upper level managers. But routine decisions involving very low cost and risk are decentralised.

The decisions that have inter-departmental or inter-divisional implications must be centralised. Authority to make decisions must be retained by upper level managers whose authority extends over more than one department.

Managers who want, uniformity of policy, decisions and actions favour centralisation. Where uniformity of policy is not needed, managers tend to decentralise the authority.

Where the individual or groups desire high degree of independence from the bosses, authority needs to be decentralised. Conversely the opposite.

Adequate and effective communication system is favourable for centralisation of authority. It is because of the reason that top managers can get the information in time and can easily exercise centralised control. Where it is inadequate and ineffective, decentralisation of authority becomes essential.

The control system in an” organisation may also decide the degree of decentralisation. Where the available system of control is far from satisfaction, managers are unwilling to decentralise their authority. Conversely, where it is effective, degree of decentralisation tends to be greater.

Where environmental factors are comparatively static and controllable, centralisation is suitable. But if these factors are ever changing, unstable and beyond the control of managers, the organisation needs to be decentralised.

‘Span of Control’ is also known as ‘span of management’, ‘span of supervision’, and ‘span of responsibility’.

The concept of span of control refers to the number of subordinates who are directly reporting to a superior. It also refers to the number of subordinates who can be effectively and efficiently supervised directly by a manager or superior.

The principle of span of control is founded upon the premise that a manager cannot directly supervise unlimited number of subordinates. His ability to supervise a large number of subordinates is constrained by many factors including the time, knowledge, energy etc. Thus, the principle of span of control states that no manager should have more subordinates under his direct supervision than he can effective and efficiently supervise and control.

There is no consensus on a specified ideal or appropriate span of control. Management thinkers and practitioners have found that four to eight subordinates for the managers at the upper level of the organisation and eight to fifteen or more for the managers at the lower levels is the appropriate number for ideal span of, control. Urwick, for instance, has suggested that ideal number of subordinates for all upper level managers to be four while for managers at lower levels (where performance of tasks takes place) the number may be eight to twelve. Ernest Dale found that the number may range between 8 and 20.

But modern theorists believe that many factors influence the appropriate span of control. Therefore, no ideal span of control exists for all kinds of managerial situations.

Although it is not possible to specify the correct span of control for every situation, but number of relationships of a managerial position goes a long way in deciding the span of control. V. A. Graicunas, a French management consultant worked on this premise and derived a formula to determine possible number relationships of a manager having a given number of subordinates.

The number of subordinates increases mathematically but the number of relationships increases geometrically. Table given below shows the number of possible relationships with different number of subordinates: Criticism of Graicunas theory-Graicunas theory has been criticised on the following counts :

  1. It is based on the false assumption that all relationships arise with equal frequency. It is not so in real life situations.
  2. It is based on yet another false assumption that all relationships occur with equal intensity.
  3. It does not determine the exact number of relationships that exists but indicates the possible number of relationships.
  4. It does not indicate the relationships that arise due to the sideways interactions such as with service departments.

Following are the factors that affect the span of control: Ability of manager is the most important factor determining the span of control. A manager who is able, competent and well trained can effectively supervise more subordinates than ope who is not.

Able, competent and well trained subordinates require less supervision and less contacts with their managers. Hence, managers can go for wider span of control if the subordinates are skilled, trained and experienced.

If the tasks are interlocked, interdependent, complex and varied, narrow span of control is essential. But simple, routine and repetitive tasks may allow for wider span of control.

Span of control shall be broader if the manager is supervising subordinates performing similar jobs. Conversely the opposite. When a manager has clearly delegated authority to his subordinates, the subordinates require minimum of the manager’s time and attention. In such a situation, a wider span of control may be opted for. Conversely the opposite.

Where the plans are well defined and workable, little supervision is needed in their implementation. In such a situation, managers can operate with wider span of control. On the other hand, if plans, policies, and procedures are ambiguous, subordinates may require considerable guidance. Hence, span of control has to be narrow.

When the degree of decentralisation is high, subordinates can make decisions at the points of action. Hence, a superior can have larger span of control. But in the case of centralisation, a superior is required to make many decisions. Hence, he will have to have a limited span of control. Newman and Summer states, an executive who personally makes many decisions is able to supervise fewer subordinates than one who merely provides occasional advice and encouragement.

Quality of standards (control system) used for performance evaluation also determine the span of control. If the standards used are objective, wider span of control may be effective. On the other hand, if the standards are subjective and non- quantitative, narrow span of control becomes necessary. Some managers operate in more unstable environment than the others. The managers operating in more unstable environment need to have narrow span of control. Conversely the opposite.

Where communication system is more effective, span of control may be wider. Conversely the opposite.

Sometimes, personal contacts with subordinates are essential for getting things done effectively. Where face-to-face contacts are frequently required, narrow span of control is suggested. If face-to- face contacts are occasionally required, manager can operate with wider span of control.

Level of managers in organisation is one of the most important determinant of span of control. Usually higher the level of managers in organisation, the smaller the span of control. Therefore, upper level managers, who deal with complex problems, have smaller span of control than the middle level managers. Similarly, middle level managers will require a smaller span of control than the first-line managers.

Where the staff assistance is available, manager can operate with wider span of control. It is due to the reason that manager can supervise larger number of subordinates.

Thus, it is clear that appropriate span of control for any managerial position depends on all these factors. A manager should consider these factors simultaneously while deciding the appropriate span of control.

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