AUTHORITYCENTRALIZATION VS DECENTRALIZATION

AUTHORITYCENTRALIZATION VS DECENTRALIZATION

AUTHORITYAUTHORITY

Authority may be defined as the legal right to give orders and get these orders obeyed.The exercise of a authority involves superior-subordinate relationship.

AUTHORITYAUTHORITY

Authority may be defined as the power to make decisions which guide the actions of another. It is a relationship between two individuals; one superior, another subordinate. The superior frames and transmits decisions with the expectation that these will be accepted by the subordinate. The subordinate executes such decisions and his conduct is determined by them.

AUTHORITYAUTHORITY

Authority in the organization is the power in a position to exercise good judgment in making decisions affecting others.

Features of AUTHORITYFeatures of AUTHORITYExistence of right in authority.Right is given to a manager by superior.Right of giving of order is lawful.Authority gives right of decision making.Authority is to influence the behavior of the subordinates in terms of doing right things at right time.Authority is determined by the personality factors of its possessor and the persons or group.

Flow of formal AUTHORITYFlow of formal AUTHORITY

Share Holders

Board of Directors

Chief Executive

Departmental Managers

Foremen

Workers

Limits of authorityLimits of authorityLimits of authority at various levels

BOTTOM LEVEL

TOP LEVEL

EXTENT OF AUTHORITY

LIMITS OF AUTHORITY

Authority is restricted by various factors:Authority must be exercised keeping in view the group’s fundamentals.Factors such as partnership agreements, memorandum, factory acts and company acts.Depends on the span of management.Manager can use the authority which is specifically delegated to him.

POWERPOWER

Max Weber definedPower is the probability that one actor within the

relationship will be in a position to carry out his own will despite resistance.

Nord definedPower is the ability to influence flows of the available

resources towards certain goals as opposed to other goals.

Features of POWERFeatures of POWERPower is one of the means to influence others for getting results.Power is used not only in getting certain results achieved but it also includes negative decisions.

Difference between Authority and Power

• Power has no such lawful practices as in authority.

• Power emerges because of personal factors and varies with the individuals. It reflects the political realities within the organization.

• Power relationship may exist between any two persons and organizational relationship may not be necessary.

AUTHORITY POWER

• Authority is legal by certain rules, regulations, laws and practices.

• Authority is institutional and originates because of structural relationships.

• Authority exists in the context of organizational relationship, mostly in superior-subordinate relationship either direct or otherwise.

Sources of PowersSources of PowersCoercive Power: Actions such as dismissal, suspension,

demotion.

Reward Power: Reward power is based on one’s control and allocation of material resources and rewards. This power is based on salaries, wages, commissions, fringe benefits.

Legitimate Power: Legitimate power is based on agreement and commonly held values allowing one person to have power over another person.

Referent Power: Referent power is based on identification. Identification is the process of learning wherein a person copies the behavior of other person whom he takes as an ideal.

Expert Power: Expert power is that influence which one wields as a result of one’s experience, special skill, or knowledge.

ResponsibilityResponsibilityResponsibility is the duty to which a person is bound by reason of his status or task. Such responsibility implies fulfillment with orders of the person making the initial delegation.

Superior

Sub-ordinate

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accountabilityaccountability

Authority is the right to act;Responsibility the obligation to carry out delegated authority;

Accountability establishes reliability for the proper discharge of the duties delegated to the subordinate.

Delegation of AuthorityDelegation of Authority

To delegate means to grant. Delegation means give authority from one manager or organizational unit to another in order to accomplish particular assignments.

Features of Delegation of AuthorityFeatures of Delegation of AuthorityDelegation is authorization to a manager to act in a certain manner.

Formal authority originates at the top level. It is distributed throughout the organization through delegation and redelegation.

Subordinate receives authority from his superior, but at the same time, his superior still retains all his original authority.

Authority once delegate can be enhanced, reduced or withdrawn depending on the situation and requirement. Eg: change in Organizational structure, policy.

Features of Delegation of AuthorityFeatures of Delegation of AuthorityDelegation of authority is always to the position created through the process of organizing.

The individual occupying a position may exercise the authority so long as he holds the position.

A manager delegates authority out of the authority vesting in him.

Manager cannot delegate which he himself does not possess.

Manager does not delegate his full authority because if he delegates , he cannot work.

Delegation of authority may be specific or general.

Steps in Delegation of AuthoritySteps in Delegation of AuthorityDetermination of Results Expected

Assignment of Duties

Authorization for actions

Creation of Obligation

Steps in DelegationSteps in DelegationDetermination of Results Expected: Authority should be

delegated to a position according to the results expected from that position. It implies that results expected from each position have been identified properly.

Assignment of Duties: Assignment of duties to the subordinate. Delegation involves assignment of these activities by a manager to subordinate.

Authorization for action: Granting of permission to take actions like making commitments, use or resources, and other actions necessary to get the assigned work done.The manager confers upon a subordinate the right to act in a specified way or to decide within limited boundaries.

Creation of Obligation: Subordinate is responsible for the total activities assigned to him and not only for the activities being performed by him. The sense of commitment required arises from the maintenance of responsibility by the superior and an accompanying insistence that the work performed must meet his expectations.

Principles of DelegationPrinciples of DelegationDelegation by Results expected

Functional Definition More a department has clear definitions of expected activities to be

undertaken, authority delegated, the more adequately the department can contribute towards accomplishing organizational objectives.

Clarity of Lines of Authority Scalar Chain, Unity of command

Level of Authority Managers should make whatever decisions they can in the light of

their delegated authority and only matters that authority limitations keep them from deciding should be referred upward.

Absoluteness of Responsibility Superiors cannot escape responsibility for the performance of activities

of their subordinates.

Equality of Authority and Responsibility

Blocks to DelegationBlocks to DelegationLove of Authority (Autocratic manager)

Maintenance of Tight Control

Fear of Subordinates

Fear of Exposure Weak manager

Attitude towards subordinates Lack of confidence in subordinate May feel that subordinates do not require more authority. Superior may not have good interpersonal relationships.

Personality of Superior Superior beliefs like modern management

Blocks to DelegationBlocks to DelegationLack of self confidence by subordinates.

When the superior is easily available for making decsions on their part.

Organizational factors

Centralization and DecentralizationCentralization and Decentralization

Centralization: Centralization is the systematic and consistent reservation of authority at

central points within an organization.

Decentralization:Decentralization is the systematic delegation of authority in an organization-

wide context.

Factors determining Degree of DecentralizationFactors determining Degree of Decentralization

Size of Organization

History of the Organization

Manager Philosophy

Availability of Managers

Pattern of Planning

Control Techniques

Decentralized Activities

Rate of Change in Organization

Environmental Influences

Concept of Line and Staff AuthorityConcept of Line and Staff Authority

Line functions are those which have direct responsibility for accomplishing the objectives of the enterprise.

Line authority becomes clear from the scalar principle as being that relationship in which a superior exercises direct supervision over a subordinate.

Line Authority has a chain of command, channel of communication, Carrier of responsibility

Concept of Line and Staff AuthorityConcept of Line and Staff Authority

Staff functions are those elements of the organization that help the line to work most effectively in accomplishing the primary objectives of the enterprise.

staff relationship is advisory. The function of people in a pure staff capacity is to investigate, research, and give advice to line managers to whom they report.

Staff Authority may be in following forms: Advisory staff authority (pure advisory relationship of

staff with line) Concurring staff authority (Quality control) Control staff authority (auditors) Functional staff authority (Staff man can give certain

orders directly to line managers)

Hierarchy: Personal department comprises of four employees- one deputy and 3 seniors under him. Over all there are19 plants make all different products like security

systems, locks, doors, etc. Each of this plant is considered as a separateprofit making center. Profits made by each of the plants are accounted forseparately in its Annual report also.

Management: Different levels of management are as follows: A- Base level of management In this level, new-entrants are trained about the various levels of the department. O - Operation P- Promotion of product T - Technical S - Sales E- This level consists of owners and M.D. Each of this level consists of three sub-sections, through which each

employee has to pass to reach a higher level. An employee, before movinginto the next level, he has to be in each sub section for at least two year

WORK CULTUREPeople Practices-People are our most cherishedassets. They make Godrej an organization. It believesthat happy employees work better with customers andconsumers.Godrej People Practices are based on 6 principles.Principle 1: Strong values which drive our behaviourand instil pride in our people for belonging to a groupwith high standards of business ethicsPrinciple 2 :Providing employees a wide platform ofyPrinciple 3 : Management of Godrej is based on speedand flexibility in decision making which empowerspeople on the job.yPrinciple 4 :Enabling employees to enjoy freedom atwork and freedom to promptly recognize and rewardperformance.

yPrinciple 5 :Providing a professionalenvironment to employees to succeed in aconstantly evolving environment.yPrinciple 6-creating an organization that learnsand encourages learning amongst its people

yThe work culture in Godrej supports learning at every stage of yourwork life.Opportunities in learning are available in the technical,functional, behavioural, general management and leadership areasthrough options like EDPs (Executive Development Programmes),MDPs (Management Development Programmes), E-learning andOnThe Job exposure to International Practices.

yRespect and recognition of performance is an inextricable part of ourwork culture. Consistent performance becomes the benchmark forgrowth opportunities, job rotations, remuneration, reward andrecognition. We provide equal opportunities to our employees to growboth horizontally & vertically through cross functional, cross businessand cross locational job rotations. This gives immense opportunities toprofessionals to add value to themselves & to satisfy their career aspirations

v Political Issueü License issue for internationaloperationü Infrastructural constraintü ATF price policyv Economic Effectsü Rising income levelü Reduced fare but yet not enoughv Social Effectsü Sound Pollutionü Plane hijackingü / 9 11 Incidentv Technology Effectsü Modernization of aircraftsü Modern technology like CAT3 and ILS

StrengthsMarket Driver.

Experience Exceeding 16 yrs.Largest fleet size.

WeaknessLoosing domestic share.

Weak brand promotion.Strikes.

OpportunityUntapped air cargo market.

Scope in International market.Service and tourism

ThreatsStrong competitors.

Fuel price hike.Overseas market competition

JET AIRWAYS