7 Things You Ought To Know Before Starting Your Organisation



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After grouping above activities, delegate the authority necessary to perform these activities in accordance with each of the identified groups. Finally, according to Koontz and O’Donnell. Connect these groups horizontally, laterally vertically through well-unfired authority relations and a powerful Management Information System (MIS).

(i) The objectives and plans to be executed to attain them are received by the top brass.

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(ii) Those activities, which would have to be carried out to implement plans and programmes, are defined.

(iii) Similar activities are grouped. The principle of departmentalisation is adopted. Subdivision of large departments is necessary. Within each subdivision, the tasks are clearly divided among various cadres of the staff. We have only defined the roles of these staff but, not actually appointed them yet.

(iv) Responsibilities of each level or position are defined in explicit terms.

(v) Authority of each level or position is defined in explicit terms.

(vi) The modes and procedures for delegating authority are defined. This is done to ensure that every individual in the organisational hierarchy knows his responsibilities, authority limits and details of his goal (or set of goals).

(vii) The physical, monetary and social requirements of each position are defined. These ought to be defined in advance, if the management wants the person in a position to perform.

(viii) The channels of communication, interaction and reporting are finalised. These channels must define relations between all the cadres of the organisation.

2. Line and Staff:

These are the organisations in which, employees carry out the basic functions of management. They are directly involved in the execution of policies and completion of procedures that are associated with their jobs.

They perform all those functions that are necessary to meet the goals. Orders and instructions move from top to bottom. Suggestions, reports and other sets of data move up the organisational ladder. The basic functional executives are involved in their own worlds.

They do not interfere in the operations of others. The executives of a line organisation do routine tasks, which are defined for them by their bosses. They are less innovative, more mechanical and totally dependent upon the procedures, policies and programmes of the organisation.

In this type of structure, the functional executives of management work according to the rules of the line organisation. Scalar chains remain intact. Orders flow from top to bottom and information as well as suggestions flow from bottom to top. In addition, we also have a group of specialist in each functional area.

These specialists assist line managers in the tasks specialists in each functional area. These specialists assist the managers in the tasks related to their functional areas. The routine operations of the firm are supported by the expert suggestions of specialists. Given chart shows a typical line and staff organisation structure. Such specialists may or may not be regular employees of the firm.

Latest data indicate that they are hired only for limited periods. So, the yacht as consultants and not an employee. They are experts whose abilities and knowledge levels are unquestionable. Normally, they guide senior managers like GMs and departments heads. The in suggestions and strategies are transformed into orders by the senior cadres and passed on to the staff down the line.

However, senior managers are not bound to obey staff specialists. They may or may not implement the suggestions of these specialists in the line organisation. Normally, specialists are not deeply involved with tine managers; but there can be exceptions to this rule. In a line organisation, line authority gives a superior authority over a subordinate. But in the case of staff structure, there is no authority vested in the expert.

According to the scalar principle of organisation, if the line of authority from the ultimate management position in an enterprise to every subordinate position is clear, the responsibility for decision making would also be clear. As a consequence, organizational communication would also be more effective.

This discussion also leads us to the fact that a line organisation is less complex then a line and staff organisation. In the latter, ego clashes, bureaucratic delay and human problems are common. Output may suffer in many cases of line and staff structures.

3. Authority:

Authority is the vital part of an organisation; it is the sole base of responsibilities which an executive bears. If the executive is not given any authority, his responsibility is also minimal. If he is given more authority, he is deemed more responsible.

He is also responsible for the actions of those subordinates over whom, he has the authority. In an organisation the authority level of each position is decided just after its creation. At the same instance the rules for delegation of such authority level are also defined. It is organisation is a small (Stage-I) firm, then the authority is centralised.

If it is a medium-sized (Stage-II) firm, then a certain degree of decentralisation can be permitted. But partial centralisation of authority always remains the norm; the owners of the Stage-II firm take vital decisions regarding pay scales, hiring, firing, price fixation and purchase of Class A items.

If the firm is a large one (like an MNC or a corporate group of Stage-Ill type), then decentralisation of authority is encouraged. Rules of the organisation are followed while, decentralisation of authority is encouraged. Rules of the organisation are followed while decentralisation is being effected; this is done to ensure that subordinates at all the levels work with maximum freedom and at the same time, they do not deviate from such norms.

4. Responsibility:

Responsibility may be defined to associate the manager with the output he has delivered by the virtue of his authority. It is often said that freedom and power bring responsibilities along with them. Without any responsibility, a powerful person can go berserk. Henry Ford is the glaring example in this context.

According to GR Terry, “Responsibility (of an executive) is the obligation to carry out assigned activities to the best of his abilities.”

According to Koontz and O’Donnell, “Responsibility may be defined as the obligation of a subordinate to whom; a duty has been assigned to perform that duty.”

Davis opines that responsibility is the obligation of an individual to perform assigned duties to the best of his ability under the direction of his executive.

5. Authority and Responsibility:

According to Robbins, authority is the right to act; responsibility is the obligation to carry out the delegated authority and accountability established is the reliability for the proper discharge of the duties delegated to the subordinate. Responsibility and accountability are different. Accountability means the maintenance of responsibility by the superior.

So, juniors are responsible for the completion of tasks given to them and are accountable to their seniors for the satisfactory performances of such tasks. Responsibility comes into beings when a person with authority needs assistance from another person (mostly, a junior) and delegates his authority to that person to get the particular task or tasks executed from that person.

Accountability create” the obligation for the maintenance of responsibility by the superior and also, a condiction that the tasks to the done must meet his expectations. Subordinates are responsibility for the completion of the tasks assigned to them and are accountable to their superiors for the satisfactory performance of such (allocated) tasks.

Thus, authority, responsibility and accountability are three different terms and closely related to one another in the context of operations of modern organisations.

6. Span of Control:

Span of control, in general sense, determines the extent and strength of authority. It refers to the numbers of subordinates who can be put under the control of a superior. It has two important implications in modern organisation of today.

Firstly, it determines how complex the job of a superior is. The larger the number of juniors reporting to him, more complex is his job. Secondly, the span of control of each manager eventually determines the number of people in a department, section or division.

Thus, the shape of the organisation is determined by the span of control. More the number of juniors reporting to a superior less would the number of superiors required and vice versa.

VA Graicunas has identified 3 types of superior-subordinate relations. These are-direct relations, direct group relations and cross relations. Direct single relations arise from the direct individual contracts of a superior with his subordinates.

For example: if 3 juniors (P, Q and R) report to a boss (B), there would be 3 direct single relations. Direct group relations arise between the superior and his subordinates in all possible combinations. Continuing the previous example, each one of the juniors has relationship with the other two.

The superior is associated with these relations. The total number of relations is 9. Cross relations arise because of the mutual interactions of subordinates who work under one boss. If we continue the example given earlier, there are 6 such relations with 3 subordinates.

Factors Influencing Span of Control:

Following factors influence the span of control in large extent:

1. Nature of task, 2. Capacity of the subordinate, 3. Capacity of the superior, 4. Assistance of the superior, 5. Communication, 6. Frequency of change, 7. Degree of planning 8. Degree of decentralisation, 9. Other supervision, 10. Technical complexity.

7. Delegation:

According to McFarland, “Delegation is that part of organising process by which, an executive, an administrator or a manager makes it possible for others to share the work of carrying out the company’s purpose.”

According to RC Davis, “The process of delegation is one whereby, certain of the executive’s functions, responsibilities and authority are released to some subordinate.”

Principles of Delegation:

In the process of delegating authority following principles are used:

1. Unity of command

2. Authority level

3. Parity of authority and responsibility

4. Absoluteness of responsibility

5. Functional definition

6. Scalar chain

7. Results expected.

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