Introduction:

Organizations are formed when a group of individuals unite to accomplish a

specific goal. They are responsible for creating a work environment that best utilizes

resources such as people, tasks and technology. But, in order to meet this objective, they

will need to create an organizational structure or design. Organizational structure and

design include work specialization, departmentalization, chain of command, span of

control, centralization and decentralization and common organizational designs.

Departmentalization is discussed here.

Definitions to Organisation:

An Organisation has been defined by E. F. L. Breach as "a system of structural

interpersonal relationships. In it, individuals are differentiated in terms of

authority, status and roles with the result that personal interaction is prescribed,

and anticipated reactions between individuals tend to occur while ambiguity and

spontaneity are decreased".

According to Louis A. Allen, Organisation is "the process of identification and

grouping the work to be performed, defining and delegating responsibility and

authority and establishing relationships for the purpose of enabling people to

work most effectively together in accomplishing objectives".

James Mooney defines organisation as "the form of every human association for

attainment of a common purpose".

Meaning:

The term 'Organisation' is derived from the word 'organism' which means a structure of

body divided into parts that are held together by a fabric of relationship as one organic

whole. In an enterprise, many managers and employees work together for achieving

common objectives. It is the organisation structure which binds them together and

brings proper adjustment and coordination in their work. The division of work and

authority and the establishment of relationship among individuals or groups are

possible due to the organisation structure.

In simple words, organizing means arranging the ways and means for the

execution of business plan. It is the creation of administrative set-up for the execution of

the plan. It suggests the framework within which the management functions. The term

organisation suggests a functional group working together for achieving common

purposes/objectives. Organisation provides mechanism for integrated and co-operative

action by two or more persons with a view to implementing any plan. Organisation

facilitates efficient administration, direction and control. It avoids wastage of raw

materials and human efforts. Every management has to establish its own organisation

structure for efficient conduct of business activities.

Importance/Nature of Organisation

1. Ensures optimum utilisation of human resources: Every enterprise appoints

employees for the conduct of various business activities and operations. They are given

the work according to their qualifications and experience. Organisation ensures that

every individual. Is placed on the job for which he is best suited.

2. Facilitates coordination: It acts as a means of bringing coordination and

integration among the activities of individuals and departments of the enterprise. It

establishes clear-cut relationships between operating departments and brings proper

balance in their activities.

3. Facilitates division of work: Different departments are created for division of

work, specialization and orderly working of the enterprise. Similarly, delegation relieves

top level managers from routine duties.

4. Ensures growth, expansion and diversification: Sound Organisation structure

facilitates expansion/diversification of an enterprise. Organisation structure has in-built

capacity to absorb additional activities and also effective control on them. A business

enterprise brings diversification in its activities within the framework of its

Organisation.

5. Stimulates creativity: Organisation provides training and self-development

facilities to managers and subordinates through delegation and departmentation. It also

encourages initiative and creative thinking on the part of managers and others.

6. Facilitates administration: Effective administration of business will not be

possible without the support of sound organisation structure. Delegation,

departmentation and decentralisation are the tools for effective administration.

7.Determines optimum use of technology: Sound Organisation structure provides

opportunities to make optimum use of technology. It facilitates proper maintenance of

equipment and also meets high cost of installation.

8.Determines individual responsibility: Responsibility is an obligation to perform

an assigned work. In a sound Organisation, the manager finds it easy to pinpoint

individual responsibility when the work is spoilt.

9.Prevents Corruption: Usually corruption exists in those enterprises which lack

sound organisation. Sound organization prevents corruption by raising the morale of

employees. They are motivated to work with greater efficiency, honesty and devotion.

10.It Stimulates Creativity: A sound and well-conceived organisation structure is the

source of creative thinking and initiation of new ideas.

11.Eliminates Overlapping and Duplication or work: Over lapping and

duplication of work exists when the work distribution is not clearly identified and the

work is performed in a haphazard and disorganized way. Since a good organisation

demands that the duties be clearly assigned amongst workers, such overlapping and

duplication is totally eliminated.

12.Sense of security Organizational structure clarifies the job positions. The roles

assigned to every manager is clear. Co-ordination is possible. Therefore, clarity of

powers helps automatically in increasing mental satisfaction and thereby a sense of

security in a concern. This is very important for job- satisfaction.

Organisational purposes

The starting point for any strategy is the purposes of an organisation. Being clear about

organisational purposes is not a trivial exercise. The very phrase ‘organisational

purposes’ is potentially misleading, suggesting as it does some clear and agreed set of

goals. In practice, the purposes of an organisation are often unclear and often contested.

Different groups both inside and outside the organisation may have competing views

(with varying degrees of influence) of what those purposes should be. Further,

organisational purposes are often tacit rather than clearly articulated.

Purposes of Organizing:

1.Profitability – This is the dominant performance measure for commercial western

organisations. It is measured either in terms of absolute profits or as a ratio, such as

return on capital or earnings per share. But this should not be assumed to be the

dominant objective of all organisations, for the following reasons:

• Public-sector service organisations have no profit objectives. They are likely to use

service measures of output and to relate these to their cost base – an approach that may

have been forced upon them by governments’ emphasis on cash-limited budgets.

• Voluntary-sector organisations may measure success in terms of levels of funding

obtained and levels of service provision.

Commercial organisations outside the UK and the USA often give less emphasis to

profitability as the dominant measure than their Anglo-American counterparts.

2. Small organisations – or at least those that survive – will give equal weighting to

cash flow as to profitability

3. Growth – This is an important objective for many organisations. Indeed, for some

organisations (for example organisations entering new markets) it is the overriding

objective.

4. Shareholder value – As shareholders are the owners of commercial organisations,

it is logical that one objective should be to maximise the value of their holdings. What is

surprising is the limited extent to which this objective features in many strategic

management processes, although some organisations do tie their strategy to an explicit

analysis of shareholder value. This is due in part to the impracticability of shareholder

value as a basis for many management decisions, and in part to the limited control that

shareholders are, in practice, able to exert over the managers of their assets.

5. Customer satisfaction – The three previous objectives ignore the interests of

customers, without which neither commercial nor non-commercial organisations can

long survive. The massive increase in competition in many commercial markets, the

erosion of monopolies and the shift towards increased consumer power are obliging

commercial organisations to give greater weight to customer interests.

Process of organisation:

1. Fixing the objectives of the organisation At the top level, administrative

management first fixes the common objectives of organisation. At the middle level,

executive management fix the departmental objectives. Lastly, at the lower level,

supervisory management fix the day-to-day objectives. All the objectives of the

organisation must be specific and realistic.

2. Finding activities must for achieving objectives After fixing the objectives, the

top-level management prepares a list of different activities (or works) which are

required to be carried out for achieving these objectives. This list is prepared at random

without following any sequence or order. This is a very important step because it helps

to avoid duplication, overlapping and wastage of efforts.

3. Grouping the similar activities All similar or related activities having a common

purpose are grouped together to make departments. For e.g. all activities or works which

are directly or indirectly connected with purchasing are grouped together to make the

Purchase Department. So various departments such as Purchase, Production,

Marketing, Finance, etc. are made. The grouping of similar activities leads to division of

labour and specialisation.

4. Defining responsibilities of each employee The responsibilities (duties) of

each employee are clearly defined. This will result in the selection of a right person for

the right post / job. He / she will know exactly what to do and what not to do. Therefore,

it will result in efficiency.

5. Delegating authority to employees Each employee is delegated (surrender or

given) authority. Without authority, the employees cannot carry out their

responsibilities. Authority is the right to give orders and the power to get obedience. The

authority given to an employee should be equal to the responsibility given to him.

6. Defining authority relationship When two or more persons work together for a

common goal, it becomes necessary to clearly define the authority relationship between

them. Each person should know who is his superior, from who he should take orders,

and to whom he will be answerable. Similarly, each superior should know what

authority he has over his subordinates.

7. Providing employees all required resources After defining the authority

relationships, the employees are provided with all the material and financial resources,

which are required for achieving the objectives of the organisation. So in this step, the

employees actually start working for a common goal.

8. Coordinating efforts of all to achieve goals This is the last stage or step in the

process of organisation. Here, the efforts of all the individuals, groups, departments, etc.

are brought together and co-coordinated towards the common objectives of the

organisation.

Types of Organisations

Formal Organisation: When the managers are carrying on organising process then

as a result of organising process an organisational structure is created to achieve

systematic working and efficient utilization of resources. This type of structure is known

as formal organisational structure.

Formal and Informal Organization Formal organisational structure clearly spells

out the job to be performed by each individual, the authority, responsibility assigned to

every individual, the superior- subordinate relationship and the designation of every

individual in the organisation. This structure is created intentionally by the managers

for achievement of organisational goal.

Features of Formal organisation:

a) The formal organisational structure is created intentionally by the process of

organising.

b) The purpose of formal organisation structure is achievement of organisational

goal.

c) In formal organisational structure each individual is assigned a specific job.

d) In formal organisation every individual is assigned a fixed authority or decision-

making power.

e) Formal organisational structure results in creation of superior-subordinate

relations.

f) Formal organisational structure creates a scalar chain of communication in the

organisation.

Advantages of Formal Organisation:

1. Systematic Working: Formal organisation structure results in systematic and

smooth functioning of an organisation.

2. Achievement of Organisational Objectives: Formal organisational structure is

established to achieve organisational objectives.

3. No Overlapping of Work: In formal organisation structure work is systematically

divided among various departments and employees. So there is no chance of duplication

or overlapping of work.

4. Co-ordination: Formal organisational structure results in coordinating the

activities of various departments.

5. Creation of Chain of Command: Formal organisational structure clearly defines

superior subordinate relationship, i.e., who reports to whom.

6. More Emphasis on Work: Formal organisational structure lays more emphasis

on work than interpersonal relations.

Disadvantages of Formal Organisation:

1. Delay in Action: While following scalar chain and chain of command actions get

delayed in formal structure.

2. Ignores Social Needs of Employees: Formal organisational structure does not

give importance to psychological and social need of employees which may lead to

demotivation of employees.

3. Emphasis on Work Only: Formal organisational structure gives importance to

work only; it ignores human relations, creativity, talents, etc.

Informal Organisation:

In the formal organisational structure individuals are assigned various job positions.

While working at those job positions, the individuals interact with each other and

develop some social and friendly groups in the organisation. This network of social and

friendly groups forms another structure in the organisation which is called informal

organisational structure.

The informal organisational structure gets created automatically and the main purpose

of such structure is getting psychological satisfaction. The existence of informal

structure depends upon the formal structure because people working at different job

positions interact with each other to form informal structure and the job positions are

created in formal structure. So, if there is no formal structure, there will be no job

position, there will be no people working at job positions and there will be no informal

structure.

Features of informal organisation:

1) Informal organisational structure gets created automatically without any

intended efforts of managers.

2) Informal organisational structure is formed by the employees to get psychological

satisfaction.

3) Informal organisational structure does not follow any fixed path of flow of

authority or communication.

4) Source of information cannot be known under informal structure as any person

can communicate with anyone in the organisation.

5) The existence of informal organisational structure depends on the formal

organisation structure.

Advantages of Informal Organisation:

1. Fast Communication: Informal structure does not follow scalar chain so there can

be faster spread of communication.

2. Fulfills Social Needs: Informal communication gives due importance to

psychological and social need of employees which motivate the employees.

3. Correct Feedback: Through informal structure the top level managers can know

the real feedback of employees on various policies and plans.

Strategic Use of Informal Organisation. Informal organisation can be used to get

benefits in the formal organisation in the following way:

1. The knowledge of informal group can be used to gather support of employees and

improve their performance.

2. Through grapevine important information can be transmitted quickly.

3. By cooperating with the informal groups the managers can skillfully take the

advantage of both formal and informal organisations.

Disadvantages of Informal organisation:

1. Spread Rumours: According to a survey 70% of information spread through

informal organisational structure are rumors which may mislead the employees.

2. No Systematic Working: Informal structure does not form a structure for smooth

working of an organisation.

3. May Bring Negative Results: If informal organisation opposes the policies and

changes of management, then it becomes very difficult to implement them in

organisation.

4. More Emphasis to Individual Interest: Informal structure gives more

importance to satisfaction of individual interest as compared to organisational interest.

Meaning of departmentation

Grouping of activities is an essential step in designing an organisational structure.

Grouping of activities into departments or other homogeneous unit is known as

departmentation. Departmentation or departmentalisation is the process of grouping

tasks into jobs, the combining of jobs into effective work groups and the combining of

groups into identifiable groups or departments.

Need /importance of Departmentation

The basic purpose of departmentation is to make the size of each departmental unit

manageable and to secure advantages of specialization. It is necessary on the account of

following reasons:

1. Specialisation: Departmentation enables an organization to avail the benefits of

specialisation. When every department looks after one major function, expertise is

developed and efficiency of operation increases.

2.Expansion:One manager can supervise and direct only a few subordinates. Grouping

of activities and personnel into departments makes it possible or the enterprise to

expand and grow. If there is no departmentation, the size of the organization will be

restricted to the manager’s span of control

3.Autonomy: Departmentation results in the division of enterprise into semi-

autonomous units. In these units, every manager is given adequate freedom. The feeling

of autonomy provides job satisfaction and motivation which in turn lead to higher

efficiency of operations.

4.Fixation of responsibilities: Departmentation enables each person to know the

specific part he is to play in the total organization. It provides a basis for building up

loyalty and commitment. The responsibility for results can be defined more precisely

and an individual can be held accountable for performance.

5.Appraisal: Appraisal of managerial performance becomes easier when specific tasks

are assigned to specific personnel. The sources of information, the skills and

competence required for total managerial decisions can be located.

6. Managerial development: Departmentation facilitates communication,

coordination and control. It simplifies the training and development of executives y

providing them opportunities to take independent decisions and o exercise initiative.

7.Administrative control:Departmentation is a means of dividing the large and

complex oranisation into small and flexible administrative units. Grouping of activities

and personnel into manageable units facilitates administrative control. Standards of

performance for each and very department can be precisely determined. Excessive

departmentation may result in several organisational problems such as erosion of the

line of command, multiple accountability, dysfunctional conflicts and difficulty of

coordination and control.

Types of departmentation:

Functional departmentalization.

Process departmentalization.

Product departmentalization.

Geographic departmentalization.

Customer departmentalization.

Combined departmentalization.

Time departmentalization.

Number departmentalization.

Now let's proceed further to explain each base or type of departmentalization.

1. Functional departmentalization In functional departmentalization, departments

are segregated i.e. separated from each other based on functions or tasks they perform.

Examples of functional departmentalization include; production department, finance

department, marketing department, human resource (HR) department, etc. Here, all

activities, which are directly or indirectly connected with production are grouped

together to make a production department.

Departmentalization based on function is depicted in the image given below.

2. Process departmentalization In process departmentalization, departments are

separated based on their role in a production process.

Best example of process departmentalization can be seen in a textile mill where we

may have a spinning department, weaving department, dyeing department, printing

department, etc. Here, inside a textile mill, all activities, which are directly or indirectly

related with spinning are grouped together to make a spinning department.

Departmentalization based on a production process is depicted below.

3. Product departmentalization In process departmentalization, departments are

separated based on a type of product produced by the company. Here, every individual

department is responsible for producing and selling the type of product assigned to

them.

A good example of product departmentalization is witnessed in an automobile

manufacturing company. In such a company, we generally see departments like a two-

wheeler department, three-wheeler department, four-wheeler department, heavy

motors department, etc., which manufacture vehicles such as motorcycles (bikes), auto-

rickshaws, cars, buses and trucks, respectively. Here, inside an automobile company, all

activities, which are directly or indirectly related to car manufacturing are grouped

together and assigned to four-wheeler or car department.

Departmentalization made on the type of product produced is depicted below.

4. Geographic departmentalization In geographic departmentalization, separate

departments are made based on the company's (i.e. institution's) operations to be

carried out either over a vast area or within some restricted area through branches or

offices established at different zones or places in that area.

First, an entire area of operation (e.g. world, country, state, city, etc.) is decided

followed by division of that area into different zones. Secondly, a branch or an office is

established in each geographical zone to manage local affairs of the company in that

zone.

For example, a large company may operate globally through its different zonal

departments established on a country basis. In a similar context, a small business or

firm may operate only within city boundaries through its offices established in east zone,

west zone, north zone and south zone of the city.

Departmentalization based on the division of an area of operation into different zones is

shown in the following image.

5. Customer departmentalization In customer departmentalization, departments

are separated from each other based on the types or groups of customers to be handled

or dealt with.

For example, customers can be classified under types such as, international or

foreign customers, inland or domestic customers, bulk purchasing or wholesale

customers, retail customers, etc.

Each group of customers needs different tactics and strategies to handle them

better. Hence, an appropriate customer departmentalization serves this purpose.

Departmentalization based on the types or groups of customers to be handled in

shown in the following image.

6. Combined departmentalization In combined departmentalization, a company

or an organization uses a mixture or combination or union of two or more different

bases of departmentalization.

For example, in practice, owing to rising market competition and emerging

complexity of tasks most organizations often uses a combination of above-discussed (see

point no. 1 to 5) types (i.e. methods or bases) of departmentalization.

Departmentalization by using a combination of two or more different bases is shown in

the following diagram.

7. Time departmentalization In time departmentalization, departments are

separated based on the division of their working time or job shifts.

For an example, departments can be made based on night shift, morning or regular

shift, evening shift, etc.

This method of departmentalization is generally seen among those organizations

who render 24-hours emergency and/or essential public services for 365 days a year.

Examples of such organizations include; hospitals, hotels, airports, police, security, and

so on.

Departmentalization done on a basis of division of work time is depicted in the following

image.

8. Number departmentalization In number departmentalization, separate

departments are made after analyzing and judging the maximum limit up to which

number of persons can be managed or educated or supervised or taken care of. This

method of departmentalization is generally used in schools and colleges for making

division of classes.

For example, students having numbers from 1 to 50 are made to sit in A division of

their class and so on. Military forces also use this method.

Departmentalization by numbers is depicted in the image given below.

CHOOSING THE BASIS OF DEPARTMENTATION

Management must be very careful in choosing the basis of departmentation because

once a pattern is chosen it is very difficult and costly to switch over to another pattern.

The following factors should be kept in view while selecting a suitable basis of

departmentation.

1. Specialisation:- The activities of an organization should be grouped in such a way

that it leads to Specialisation of work. This helps to improve efficiency and economy of

operations and enables people to become experts.

2. Coordination: Coordination in the performance of different activities is necessary

so that they contribute maximum towards the organizational goals.

3. Control:- The departmentation should be such that it facilitates measurement of

performance and timely corrective action. Effective control helps to achieve

organizational goals efficiently and economically.

4. Cost: The pattern and the number of departments should be so decided that

maximum possible economy is achieved in the utilization of physical facilities and

personnel.

5. Special attention:- The various activities should be given adequate attention so

that each necessary activity is performed and there is no unnecessary duplication of

activities.

6. Local Conditions:- Should be adequately considered in a scheme of

decentralization. Departmentation should be adjusted according to available resources.

7. Human consideration:- the existence of informal groups, cultural patterns, value

system, etc. should be given due consideration. Attention to human factors will make

departmentation more efficient and effective.

Span of Control

Definition of Span of Control

According to Louis Allen, "Span of control refers to the number of people that a

manager can supervise."

According to Prof. Dimock, "The span of control is the number and range of

direct, habitual communication contacts between the Chief Executive of an

enterprise and his principal fellow officers."

Span of Control is also referred by many other names. It is often known as 'Span of

Supervision' or 'Span of Management' or 'Span of Attention'. However, the term 'Span of

Management' suits as the most appropriate name, since control and supervision are the

elements of management.

Span of Control in management and administration thus refers to the total number of

people (here, subordinates or employees working under) whom a manager or an

administrator can effectively control and supervise.

Every superior can supervise a limited number of subordinates (employees). Therefore,

every superior should be assigned or given an authority to handle only few subordinates.

According to most management experts, at the top level of management, the span of

control should not be more than 1:6 while at the lower level of management, the span of

control should not be more than 1:20. This means, the superior at the top level should

not have more than 6 subordinates under his control. Similarly, the superior at the

lower level should not have more than 20 subordinates under his control. However,

these are only theoretical figures. In practice, the span of control depends on many

factors such as nature of work, ability of superior, ability of subordinates, etc.

Advantages of Appropriate Span of Control

An appropriate span of control gives the following benefits to the organisation.

1. Better supervision and control: If there is an appropriate span of control, then

the superior will have a limited number of subordinates under him. This will result in

better supervision and control.

2. Increases efficiency An appropriate span of control results in better supervision

and control. This increases the efficiency, productivity and profitability of the

organisation.

3. Increases goodwill An appropriate span of control increases the efficiency of the

organisation. Therefore, they distribute good quality goods and services at fair prices to

the customers. They also give high rate of dividend to the shareholders. All this

increases the goodwill of the organisation.

4. Good professional relations If there is an appropriate span of control, then the

superiors and subordinates will get time to develop close and good professional

relations between themselves.

5. Team spirit and morale An appropriate span of control creates good relations

between superiors and subordinates. This improves the team spirit and morale of the

employees.

6. Good communication and co-ordination If there is an appropriate span of

control, then superiors will get time to communicate with every single subordinate. This

will improve the communication in the organisation. Good communication results in

good co-ordination. Therefore, an appropriate span of control results in good

communication and co-ordination.

7. Facilitates quick action An appropriate span of control results in good

professional relations, better communication and coordination. This facilitates quick

action in the organisation.

8. Less labour absenteeism and turnover An appropriate span of control helps to

decrease the labour absenteeism and turnover in the organisation.

9. Develops discipline and mutual trust An appropriate span of control helps to

develop discipline and mutual trust.

10. Superiors can concentrate on important work If there is an appropriate

span of control, then the superior will get time to concentrate on important work.

However, if the span of control is very wide, then the superior will have to spend most of

his time on supervising and controlling his subordinates.

Factors Affecting Span of Control or Span of Management

1. Qualification and Qualities If the superiors and subordinates are well-qualified,

trained, experienced, and if they are experts in their jobs then the span of control will be

wide and vice-versa.

2. Level of Management If the superiors are working at the top-level of management,

then they have more responsibilities. Therefore, their span of control will be narrow and

vice-versa.

3. Nature of Work If the work is difficult then the span of control is narrow and vice-

versa.

4. Superior - Subordinates Relationship If there are good relations between the

superior and subordinates, then the span of control will be wide and vice-versa.

5. Degree of Centralisation Under decentralisation, the superior has to take fewer

decisions. Therefore, he can have a wide span of control. However, under centralisation,

the superior has to take many decisions. Therefore, he should have a narrow span of

control.

6. Use of Communication Technology If face-to-face communication is used, then

the span of control will be narrow. However, if electronic devices are used for

communication then the span of control will be wide.

7. Financial position of the Organisation If the organisation has a good financial

position, then it can have a narrow span of control. This is because a narrow span

requires more managers. More managers will increase the compensation or wage bill of

the organisation. However, if the organisation has a bad financial position, then it will

be forced to have a wide span of control.

8. Clarity of Plans and Responsibilities If the plans are clear and if the

responsibilities are well-defined, then the span of control will be wide. This is because

the subordinates will not have to go and consult their superior repeatedly for getting

orders and guidance.

9. Time available for Subordinates If the superior is busy with another work, and if

he has less time for his subordinates then his span of control will be narrow and vice-

versa.

10. Faith and Trust in Subordinates If the superior has good faith, trust and

confidence in his subordinates then the span of control can be wider.

Graicunas Theory of Span of Control

Vytautas Andrius Graiciunas (1898-1952) was a Lithuanian french management

consultant, management theorist and engineer.

In 1933, he published a paper called "Relationship in Organisation." In this paper, he

mentioned three types of Superior-Subordinate relationships, viz.,

1.Direct Single Relationships,

2.Direct Group Relationships, and

3.Cross Relationships.

According to V.A. Graicunas, as the number of subordinates increases arithmetically

(like 1, 2, 3, 4, 5, 6, etc.) the number of relationships which the superior has to control

also increases almost geometrically (like 1, 6, 18, 44, 100, 244, etc.). Therefore, a

superior can only control a limited number of subordinates, and anything beyond this

limit is very hard to control.

Example of Graicunas Theory

V.A. Graicunas Theory can be explained with the help of this simple example.

For example, consider Gaurav (G) is a superior (boss) and Manoj (M) and Sameer (S)

are his subordinates (juniors or lower-grade employees).

According to V.A. Graicunas, Gaurav (G) has to control following three types of

relationships, with or among Manoj (M) and Sameer (S):-

(a) Direct Single Relationships :G with M and G with S, i.e. a total of 2 direct single

relationships.

(b) Direct Group Relationship : G with M in presence of S, and G with S in presence

of M, i.e. a total of 2 direct group relationships.

(c) Cross Relationships : M with S, and S with M, i.e. again a total of 2 cross

relationships.

Therefore, total number of relationships which Gaurav (G) has to control are:- 2 + 2 + 2

= 6 relationships.

Thus, when the number of subordinates is 2, the number of relationships, which the

superior (boss) has to control is 6. Similarly, when the number of subordinates is 3, the

number of relationships to control will be 18.

Graicunas Formula

V.A. Graicunas has explained his principle with the help of the this formula:-

By using Graicunas formula, we can find out the number of relationships (r), if the

number of subordinates (n) is given.

• Example of Graicunas Formula ↓

Consider this e.g. If a superior has 5 subordinates (n=5) then the number of

relationships (r) which he has to control can be calculated as follows:-

The above table or chart was prepared by using Graicunas formula.

According to V.A. Graicunas, when the number of subordinates increases then there is

an increase in the Direct Single Relationships, Direct Group Relationships and Cross

Relationships.

So, as the number of subordinates increases arithmetically, the number of relationships

among them also increases almost geometrically.

So, according to him, a top-level manager can effectively manage only 222 relationships.

Therefore, a top-level manager should not have more than 6 subordinates. Similarly, a

lower-level manager should not have more than 20 subordinates.

Limitations of Graicunas Theory

He gives more importance to the numerical factor.

He gives more importance to the relationships.

Meaning of Delegation of Authority ↓

A manager alone cannot perform all the tasks assigned to him. In order to meet the

targets, the manager should delegate authority. Delegation of Authority means division

of authority and powers downwards to the subordinate. Delegation is about entrusting

someone else to do parts of your job. Delegation of authority can be defined as

subdivision and sub-allocation of powers to the subordinates in order to achieve

effective results.

Delegation is not a process of abdication. The person who delegates does not divorce

himself from the responsibility and authority with which he is entrusted. He remains

accountable for the overall performance and also for the performance of his

subordinates. Delegation is needed when the volume of work to be done is in excess of

an individual's physical and mental capacity.

Definitions of Delegation of Authority ↓

According to F.C. Moore, "Delegation means assigning work to the others and

giving them authority to do so."

According to O. S. Miner, "Delegation takes place when one person gives another

the right to perform work on his behalf and in his name and the second person

accepts a corresponding duty or obligation to do that is required of him."

According to Louis Allen, "Delegation is the dynamics of management, it is the

process a manager follows in dividing the work assigned to him so that he

performs that part which only he, because of his unique organizational

placement, can perform effectively, and so that he can get others to help him with

what remains."

Advantages / Importance of Delegation of Authority

1. Relieves manager for more challenging jobs : Delegation makes it possible for

the managers to distribute their workload to others. Thus, managers are relieved of

routine work and they can concentrate on higher functions of management like

planning, organising, controlling, etc.

2. Leads to motivation of subordinates : Subordinates are encouraged to give their

best at work when they have authority with responsibility. They take more initiative and

interest in the work and are also careful and cautious in their work. Delegation leads to

motivation of employees and manpower development.

3. Facilitates efficiency and quick actions: Delegation saves time enabling tile

subordinates to deal with the problems promptly. They can take the decisions quickly

within their authority. It is not necessary to go to the superiors for routine matters. This

raises the overall efficiency in an Organisation and offers better results in terms of

production, turnover and profit.

4. Improves employee morale : Delegation raises the morale of subordinates as

they are given duties and supporting authority. They feel that they are responsible

employees. The attitude and outlook of subordinates towards work assigned becomes

more constructive.

5. Develops team spirit : Due to delegation, effective communication develops

between the superiors and subordinates. The subordinates are answerable to superiors

and the superiors are responsible for the performance of subordinates. This brings

better relations and team spirit among the superiors and subordinates

6. Maintains cordial relationships : The superiors trust subordinates and give

them necessary authority. The subordinates accept their accountability and this

develops cordial superior-subordinate relationships.

7. Facilitates management development : Delegation acts as a training ground for

management development. It gives opportunity to subordinates to learn, to grow and to

develop new qualities and skills. It builds up a reservoir of executives, which can be used

as and when required. Delegation creates managers and not mere messengers.

Delegation of Authority ↓

Elements of Delegation

Delegation involves the following three basic elements

1) Assignment of duties to subordinates,

2) Granting of authority to enable the subordinates to erform the duties assigned,

and

3) Creation of responsibility on the part of subordinate to perform duties in an

orderly manner.

1. Assignment of Duties - The delegator first tries to define the task and duties to the

subordinate. He also has to define the result expected from the subordinates. Clarity of

duty as well as result expected has to be the first step in delegation.

2. Granting of authority - Subdivision of authority takes place when a superior

divides and shares his authority with the subordinate. It is for this reason, every

subordinate should be given enough independence to carry the task given to him by his

superiors. The managers at all levels delegate authority and power which is attached to

their job positions. The subdivision of powers is very important to get effective results.

3. Creating Responsibility and Accountability - The delegation process does not

end once powers are granted to the subordinates. They at the same time have to be

obligatory towards the duties assigned to them. Responsibility is said to be the factor or

obligation of an individual to carry out his duties in best of his ability as per the

directions of superior. Responsibility is very important. Therefore, it is that which gives

effectiveness to authority. At the same time, responsibility is absolute and cannot be

shifted. Accountability, on the others hand, is the obligation of the individual to carry

out his duties as per the standards of performance. Therefore, it is said that authority is

delegated, responsibility is created and accountability is imposed. Accountability arises

out of responsibility and responsibility arises out of authority. Therefore, it becomes

important that with every authority position an equal and opposite responsibility should

be attached.

Therefore every manager,i.e.,the delegator has to follow a system to finish up the

delegation process. Equally important is the delegatee’s role which means his

responsibility and accountability is attached with the authority over to here.

Objectives of Delegation of Authority ↓

To reduce the excessive burden on the superiors i.e., executives and managers

functioning at different levels.

To provide opportunities of growth and self development to junior executives.

To create a team of experienced and matured managers for the Organisation. It

acts as a technique of management and human resource development.

To improve individual as well as overall efficiency of the Organisation.

Obstacles / Barriers to Effective Delegation of Authority ↓

(A) Obstacles / Barriers on the Part of Manager / Superior / Delegator

1. Unwillingness of the manager to delegate authority: Some

superiors/managers tend to think that they can do the job better when they themselves

handle the job. The attitude that 'I can do it better myself' on the part of superior acts as

an obstacle to delegation. Some managers (superiors) who are autocratic and power

worshippers feel that delegation will lead to reduction of their influence in the

Organisation. A manager may feel that if he has a competent subordinate and if he

delegates authority to the subordinate, quite likely he will outshine him (manager) and

may be promoted.

2. Fear of competition : A manager may feel that if he has a competent subordinate

and if he delegates authority to the subordinate, quite likely he will outshine him. Fear

of subordinate's excellence may come in the way of delegation.

3. Lack of confidence in subordinates : A manager may hesitate to delegate

authority, if he feels that his subordinate is not competent to deal with the problem and

take decisions. Even fear of losing control over the subordinates acts as an obstacle to

delegation. In addition, fear of being exposed due to personal shortcomings may act as

an obstacle in the process of delegation.

4. Lack of ability to direct: Sometimes, a manager may experience difficulty in

directing the efforts of his subordinates because of his inability to identify and

communicate the essential features of his long-range plans and programmes.

5. Absence of controls that warn of coming troubles : An Organisation might

not have developed the controlling techniques to know in advance the serious problems

lying ahead. It may happen due to concentration of power in the hands of few people. As

a result, manager may resist delegation.

6. Conservative and cautious temperament of the manager : If a manager has a

conservative and over-cautious approach, there will be psychological barrier in the way

of delegation. A manager avoids delegation as he feels that something may go wrong

even when the instructions given are clear and the subordinates are reliable.

7. Desire to dominate subordinates : Managers (Superiors) normally, have a desire

to dominate the subordinates functioning under their control. They feel that their

domination will reduce if the powers are delegated to subordinates. They also feel that

due to delegation, the subordinates will know their managerial deficiencies. In order to

maintain their superior status and in order to dominate the subordinates, they avoid

delegation itself.

(B) Obstacles / Barriers on the Part of Subordinates ( Why Subordinates

Resist Delegation? )

1. Too much dependence on the manager for decisions : Some subordinates

avoid responsibility even when the superior/manager is prepared to delegate authority.

They want the manager to tackle problems and take decisions. A subordinate who is not

confident about his performance/ability will certainly try to shirk responsibility even

though his superior is prepared to delegate functions and authority.

2. Fear of criticism : Subordinates express unwillingness to accept delegated

authority because of the fear of criticism in the case of mistakes. They fear that they may

be criticized by others if they commit mistakes. Such subordinates have the following

feeling in their mind, "Why should I stick my neck out for my boss?"

3. Lack of information : A subordinate may hesitate to accept a new assignment,

when he knows that necessary information to perform the job is not likely to be made

available to him. He is reluctant to accept delegated functions and authority as he feels

that he will not be able to perform well due to inadequate information available.

4. Absence of positive incentives : Positive incentives like recognition of work and

rewards go a long way in building up the morale of subordinates. In the absence of such

incentives in the form of recognition, appreciation or monetary benefit, a subordinate

may not be prepared to accept delegation of authority.

5. Absence of self-confidence : A subordinate may lack self-confidence about his

ability to take quick and correct decisions. He may not like to accept new challenging

functions as he lacks self-confidence. Thus, lack of self-confidence on the part of

subordinates is one obstacle which comes in the way of delegation of authority.

6. Difficulty in decision-making : A subordinate may not have the skill and the

expertise to take quick and correct decisions. He prefers to go to his superior (boss) and

ask for his guidance or opinion. Such psychology acts as a cause for non-acceptance of

delegation. A subordinate avoids delegation due to such mental tension or inferiority

complex.

7. Poor superior-subordinate relations : Absence of cordial relations in between

the superior and the subordinates hampers the process of delegation of authority. The

attitude of the superior towards subordinate may not be friendly but hostile. There may

be undue interference in the work assigned to the subordinate. Even the good work of

subordinate may not be appreciated by the superior. Such situation creates unfavorable

attitude of subordinate towards delegation. He avoids delegation as and when offered.

8. Undue interference by superior : A superior should not interfere in the duties

delegated to the subordinate. He may offer guidance as and when asked for. Some

superiors interfere in the work of his subordinate and try to control him often and again.

In the absence of legitimate freedom, the subordinate becomes uneasy and prefers to

remain away from the process of delegation.

9. Fear of being exposed : Some subordinates may have inferiority complex. They

feel that they have limited capacity to accept the challenges which are bound to come

out to delegation. They feel that their inability to deal with new problems will be

exposed due to delegation. This fear acts as an obstacle to delegation.

Principles of Effective Delegation:

There are a few guidelines in form of principles which can be a help to the manager to

process of delegation. The principles of delegation are as follows: -

1. Delegation of result excepted- suggests that every manager before delegating the

powers to the subordinate should be able to clearly define the goals as well as results

expected from them. The goals and targets should be completely and clearly defined and

the standards of performance should also be notified clearly. For example, a marketing

manager explains the salesmen regarding the units of sale to take place in a particular

day, say ten units a day have to be the target sales. While a marketing manager provides

these guidelines of sales, mentioning the target sales is very important so that the

salesman can perform his duty efficiently with a clear set of mind.

2. Parity(Co-equal) of Authority and Responsibility- According to this principle,

the manager should keep a balance between authority and responsibility. Both of them

should go hand in hand.

According to this principle, if a subordinate is given a responsibility to perform a

task, then at the same time he should be given enough independence and power to carry

out that task effectively. This principle also does not provide excessive authority to the

subordinate which at times can be misused by him. The authority should be given in

such a way which matches the task given to him. Therefore, there should be no degree of

disparity between the two.

3. Absolute of responsibility- This says that 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. It

does not means that he can escape from his responsibility. He will always remain

responsible till the completion of task.

Every superior is responsible for the acts of their subordinates and are

accountable to their superior therefore the superiors cannot pass the blame to the

subordinates even if he has delegated certain powers to subordinates example if the

production manager has been given a work and the machine breaks down. If repairmen

is not able to get repair work done, production manager will be responsible to CEO if

their production is not completed.

4. Unity of Command : This principle of delegation suggests that everyone should

have only one boss. A subordinate should get orders and instructions from one superior

and should be made accountable to one superior only. This means 'no subordinate

should be held accountable to more than one superior'. When a subordinate is asked to

report to more than one boss, it leads to confusion and conflict. Unity of command also

removes overlapping and duplication of work. In the absence of unity of command,

there will be confusion and difficulty in fixing accountability.

5. Effective Communication Support System : This principle suggests that there

should be continuous flow of information between the superior and the subordinates

with a view to furnishing relevant information to subordinate for decision-making. This

helps him to take proper decisions and also to interpret properly the authority delegated

to him. Delegation system may not work smoothly in the absence of effective

communication between the superior and subordinates.

6. Limits of Authority: This principle suggests that a manager should exercise his

authority within the jurisdiction/framework given. The manager should be forced to

consult their superiors with those matters of which the authority is not given that means

before a manager takes any important decision, he should make sure that he has the

authority to do that on the other hand, subordinate should also not frequently go with

regards to their complaints as well as suggestions to their superior if they are not asked

to do. This principle emphasizes on the degree of authority and the level upto which it

has to be maintained.

7. The Scalar Principle : The scalar principle of delegation maintains that there

should be clear and direct lines of authority in the Organisation, running from the top to

the bottom. The subordinate should know who delegates authority to him and to whom

he should contact for matters beyond his authority. They (subordinates) should also

know what is expected from them. This principle justifies establishment of the

hierarchical structure within the Organisation.

Decentralization

Decentralization is a systematic delegation of authority at all levels of management

and in all of the organization. In a decentralization concern, authority in retained by the

top management for taking major decisions and framing policies concerning the whole

concern. Rest of the authority may be delegated to the middle level and lower level of

management.

The degree of centralization and decentralization will depend upon the amount of

authority delegated to the lowest level. According to Allen, “Decentralization refers to

the systematic effort to delegate to the lowest level of authority except that which can be

controlled and exercised at central points.

Definitions of Decentralisation

According to Henry Fayol, "Everything that goes to increase the importance of the

subordinate’s role is decentralisation, everything that goes to reduce it is centralisation."

This definition makes it clear that even in decentralisation, delegation to the lowest

levels is not complete as the basic functions in the management process are centralized.

Advantages Of Decentralization

1. Decentralization Facilitates Managers' Development In decentralization,

appropriate responsibility and authority is delegated to subordinate level managers. It

gives them an opportunity to hone their skills and efficiency so as to get promotions.

Therefore, decentralization creates the reserve of talency.

2. Relief To Top Managers In decentralization, most of the routine managerial

responsibilities are delegated to middle and lower level managers. It minimizes the

excessive workload of the top managers. It gives sufficient time to the top managers to

concentrate on non-programed decisions like planning, policy making, strategy

formulation etc.

3. Effective Control In decentralization, it is convenient to set standards of

performance. This helps to compare actual performance with standard performance

more quickly. This helps in taking prompt decisions to correct deviations. This leads to

maintaining effective control.

4. Possibility Of Better Decision Decentralization delegates the decision making

authority to the managers nearest to the level of operation. The managers working

nearest to the operation are in a better position to understand the complexity of

problems. This helps in taking a better decision to solve the problems.

5. Decentralization Facilitates Diversification The addition of new product lines

or expansion of existing lines of business develops complexity in an organization. This

also develops a challenge to the top management. The top managers can meet such

challenges by delegating authority to their subordinates. Top managers can only play the

role of coordinators.

6. High Morale and Motivation Decentralization is highly motivational as it gives

the subordinates the freedom to act and take decisions. This develops among the

subordinates a feeling of status and recognition and ultimately a feeling of dedication

and commitment. This helps in maintaining high motivation and morale of

subordinates.

Disadvantages Of Decentralization

1. Decentralization Increases Expenditure Decentralization needs qualified,

competent and skilled managers at the middle and lower levels. They are to be paid

remuneration on the basis of their qualification and experience. Besides, there is the

possibility of duplication of effort, which unnecessarily may increase cost of production.

2. Decentralization Creates Conflict In decentralization, the top level management

puts more pressure on departmental managers to increase output and revenue. In such

a situation, every department lays more emphasis on their own departmental goals

instead of corporate goals. This may give rise to inter-departmental conflict and too

much fragmentation creates problems in coordination and control.

3. Decentralization Is Unsuitable For Emergency Situation In decentralization,

lower and middle level managers are assigned authority only for routine decisions.

Whenever they face complex and non-programmed problems they cannot take a

decision due to limited authority.

4. Decentralization Maximizes Risk In decentralization, decision making authority

is delegated to the subordinate level. If subordinate level managers are unskilled and

incapable, they may take wrong decision, which may increase the risks and result in

losses.

5. Decentralization Is Unsuitable For Specialized Services The concept of

decentralization is not applicable in some types of services. It is not suitable for

specialized nature of services like accounting, human resource, engineering, surgery etc.

Line and Staff Organization

Line relationship refers to the relationship between a superior and subordinate in an

organisation.

Staff relationship refers to employees who work in the organisation but are not in the

field of the core business of the firm. For example, in a school office staff and canteen

workers have a staff relationship as they are not directly educating pupils.

Line and Staff Organisation Structure

Managing Director

↓ ↓ ↓

Production

Manager

Marketing

Manager

Finance Manager

↓ ↓ ↓

Plant Supervisor Market Supervisor Chief Assistant

↓ ↓ ↓

Foreman Salesman Accountant

In the line and staff Organisation, line executives and staff (specialists) are combined

together. The line executives are 'doers' whereas staff refers to experts and act as

'thinkers'. The following chart shows line and staff Organisation structure:

Characteristics of Line and Staff Organisation

1. Planning and execution: There are two aspects of administration in this

Organisation, viz., planning and execution.

2. Combining line and staff: Planning function is entrusted to staff specialists who

are 'thinkers' while execution function is given to line executives who are 'doers'. The

staff is supportive to line.

3. Role of authority: The line managers have authority to take decisions as they are

concerned with actual production. The staff officers lack such authority.

4. Guidance from staff: The staff provides guidance and advice to line executives

when asked for. Moreover, line executives may or may not act as per the guidance

offered.

5. Exercising control: The staff manager has authority over subordinates working in

his department.

6. Scope for specialization: There is wide scope for specialization in this

Organisation as planning work is given to staff and execution work is given to line

executives.

7. Possibility of conflicts: Conflicts between line and staff executives are quite

common in this Organisation but can be minimized through special measures.

Merits of Line and Staff Organisation

1. Less burden on executives: Line executives get the assistance of staff

specialists.This reduces the burden of tine executives. This raises overall efficiency and

facilitates the growth and expansion of an enterprise.

2. Services of experts available: The benefits of services of experts are provided to

line managers. Highly qualified experts are appointed and they offer guidance to line

executives.

3. Sound decision-making: Line and staff Organisation facilitates sound

management decisions because of the services of experts and specialists. The decisions

are also taken in a democratic method i.e. in consultation with the experts.

4. Limited tension on line managers: The pressure of work of line bosses is

brought down as they are concerned only with production management.

5. Benefits of specialization: There is division of work and specialization in this

Organisation. Naturally, the benefits of division of work and specialization are easily

available.

6. Training opportunities to employees: Better opportunities of advancement are

provided to workers. The scope for learning and training for promotions are available.

Demerits of Line and Staff Organisation

1. Delay in decision-making: The process of decision-making is delayed, as line

executives have to consult staff experts before finalizing the decisions. The decisions of

line managers are likely to be delayed due to this lengthy procedure.

2. Buck passing among executives: The line bosses are concerned with actual

execution of work. However, they depend on staff experts for guidance. If something

goes wrong, the attempt is made to pass on the blame by one party to the other. Thus,

there is shifting of responsibility or buck-passing.

3. Conflicts between line and staff executives: In this Organisation, quarrels and

conflicts between line managers and staff specialists are quite common. The line

managers are generally not interested in the advice offered by experts. Secondly,

specialists feel that the line bosses lack knowledge of new ideas. Such conflicts lead to

bitterness.

4. Costly Organisation: Line and staff Organisation is a costly Organisation as the

line executives are supported by highly paid staff executives who are experts. All this

adds to the overhead expenses and the cost of production increases.

5. Complicated operation: This Organisation is too complicated in actual operation

because of dual authority, division of functions and too much dependence on staff. The

unity of command principle is violated.

6. Internal discipline is affected adversely: The internal discipline is likely to be

affected adversely due to decentralisation and division of loyalty of subordinates.

Conflict between Line and Staff Executives.

Arguments of Line Executives against Staff Managers / Officers

1. Dilution of authority: Line executives argue that the introduction of staff

managers dilutes their authority and also leads to interference in their work. They feel

that their jobs become less important.

2. Stealing show: Line managers feel that the staff executives tend to steal show for

the work that turns out to be successful. On the other hand, when things go wrong, they

alone have to face the blame and criticism.

3. Lacks practical knowledge: Line executives argue that staff executives are not

familiar with the situation where actual work is carried out. The services offered by the

staff executives are rather theoretical and not practical.

4. Lacks human skills: Line executives argue that staff managers with human

relations skills are rarely available. Staff presents matters mechanically.

5. Domination of staff managers: Line executives argue that staff managers always

feel that they are superior as regards education and skills. They dominate line

executives. This is treated as unwanted interference.

6. Easy access to top management: The staff managers work at the head office and

have easy access to top level management. They try to show their superiority to top level

management by making new plans and suggestions which may not be acceptable to line

executives. The top management feels that the line executives are incompetent due to

which the services of staff officers are required. This is a source of agony for line

managers.

7. Stress on paper work: The staff executives are engaged in the paper work. In

addition, they need information and various details from the line executives. As a result,

there is increase in the paper work of line executives, which they resent.

Arguments of Staff Managers against Line Executives

1. Resistance to new plans and ideas: According to staff managers, the line

managers usually oppose/resist new plans/ideas. They treat this as interference in their

routine work. A staff manager is a professional critic. He suggests modifications, which

are useful, but the suggestions are opposed as unnecessary interference. This leads to

conflicts.

2. Inadequate support from line executives: Staff managers argue that line

Managers do not take benefit of their services. Their services are used only as a measure

of last resort.

3. Inadequate scope for the use of authority: Staff managers argue that line

managers do not give importance to suggestions given by them. This reduces the scope

of activities of staff managers. Moreover, the suggestions of staff managers are not

binding on line executives and this affects their importance and contribution.

4. Lack of support from top management: Staff managers also feel that they do

not get full support from the top management. The top management is more concerned

with regular production. As a result, it gives better treatment to line bosses.

5. Limited cooperation from line executives: Staff managers argue that line

executives adopts negative approach towards them even when both are working in the

same Organisation with identical objectives. Line executives do not take the

advice/suggestions of staff managers in the right spirit. They reject suggestions on the

ground that they are not practicable even without giving fair trial. This indicates limited

co-operation from line executives.

6. Supply of inadequate information: Staff managers argue that line executives do

not approach them well in advance with all necessary details of the problems faced by

them. They do not supply relevant information but want the solution quickly. If solution

is suggested within the time limit, it is again rejected on the ground that it is not

workable. This leads to dissatisfaction and conflicts.

7. Absence of authority: Staff managers feel frustrated as they offer suggestions for

solving the problem through hard work and also by using their skills and experience.

However, they do not have commanding authority to execute their suggestions.

Easy Steps for Resolving Line and Staff Conflict | Organizational

Management

For an organisation to operate and progress, it is essential that line and staff work

harmoniously. In order to achieve cordial relations between line and staff people, the

following steps ‘should be taken’:

(i) the limits of line and staff authority should be laid down clearly. It must be clearly

understood that ultimately the departments are responsible for operating decisions and

that staff is responsible only for providing advice and service to appropriate line

departments.

(ii) A line department must give serious consideration to advice given by the staff. In

case the line manager disagrees with the suggestions of the staff man, both of them

should have the right to appeal to higher authorities,

(iii) the staff manager must operate within the policies and objectives of the company

and recognise the fact that all new ideas are bound to be resisted in the initial stages.

People tend to resist ideas that threaten change to their way of doing things. The fact

that a change is even suggested seems to imply that what they were doing was not good

enough. Therefore, any change proposed by the staff men must be carefully brought in.

(iv) The staff men must also recognise the difficulties in the way of implementing ideas,

(v) Line and staff people should try to understand the orientation of each other. They

should try to achieve cooperation for the achievement of enterprise objectives.

The line and staff functions can operate very usefully in pursuance of the overall

objectives of the company, in case they perceive each other’s view point.

Some people argue that distinction between line and staff is an obsolete concept

and should be done away with. They argue that it is meaningless to segregate

organisation activities on the basis of their contribution to the achievement of goals.

However, in the recent years, the horizontal and diagonal relationships and work flow

are gaining greater importance than the vertical relationships represented by the line

authority.

Committees:

Committees are formed whenever group decision making is necessary on

strategic issues after thorough investigation.

“A Committee is a formal group of individuals who meet regularly to solve

strategic problems.”

A Committee is a formal group of people who meet by a plan to discuss,

deliberate on problems and recommend solutions.

Types of Committees:

1. Strategic Committee

2. Executive/Line Committee

3. Advisory/Staff Committee

4. Joint Action Committee

1.Strategic Committees: These Committees are formed to formulate strategies to

make strategic decisions.

2.Executive/Lines Committees: These Committees are empowered with the

decision making of operational issues and executing or implementing strategic

decisions.

3. Advisory/Staff Committee: These Committees are constituted with the senior

and experienced executives in order to offer advises to the chief executive and in crisis

situations.

4.Joint Action Committee: These Committees are constituted when decisions are to

be implemented by a group of employees are from various departments.

Advantages

1. Pooling of knowledge and experience: The personal skills and Hence of several

persons are pooled together. Group deliberations and combined judgment of all the

members can be brought to bear on important problems. There can be a more realistic

and objective appraisal of the problem from all angles. This helps to improve the quality

of decisions. Business problems are multifaceted and require breadth of decision.

Subjective and unbalanced decisions can be minimized. "When several people study and

deliberate on each critical problem, there is more assurance that every facet will be

thoroughly explored and weighed in terms of the interests of the company as a whole."1

A group of people can bring to bear a wider range of experience and a more thorough

probing of facts than a single person.

2. Improved communication: Committees serve as important means of

communication between the members of an organisation. Information and ideas can be

easily transmitted both upward and downward. Unwritten policies and objectives can be

explained effectively through deliberations of a committee. Creative ideas emerge from

interactions among the members. Doubts and ambiguity can be removed on the spot.

3. Facility of coordination: Participation in committee meetings promotes mutual

understanding, team-work and cooperation among employees. Committees serve as an

important technique of coordination by bringing together managers from different

departments. Members of a committee come to appreciate each other's point of view

and they can pursue a common course of action. A committee is a useful means of

integrating and unifying various points of view.

4. Better motivation: Committees help to improve the motivation and morale of

employees by providing them an opportunity to express them selves. Participation in the

decision making process not only improves quality of decisions, it creates a sense of

belonging. Employees are keen on the execution of decisions in the making of which

they have taken an active part.

5. Executive development: A committee is an useful device for educating and

training subordinate managers. Participation in committee meetings provides

opportunity for learning through experience. A manager learns to take an integrative

view of organizational problems by serving on various committees. Executive

development ensures continuity of management in the organisation.

6. Democratic management: As a plural executive, a committee helps to avoid the

risk of concentration of too much authority in the individual and the danger of abuse of

power. There is no fear of delegating too much authority to one individual. The tyranny

of a powerful head can be reduced. Group authority makes for diffusion of power and

democratic leadership.

7. Representation of interests: Various interest groups can be given representation

on a committee. Such representation may be necessary to secure the commitment and

cooperation of people. Members can be enlightened on policy matters and ideas beyond

the capacity of one individual can be generated.

8. Consolidation of authority: The manager of every department or section may

have a portion of the total authority required to take a decision. Such authority is known

as splintered authority. In such a case, a committee of different managers may be

constituted to consolidate the authority. In this way the decision can be taken without

reference to the higher level. However, frequent need for consolidation of splintered

authority is the sign of a poor organisation structure.

9. Avoidance of action: Sometimes, committees are constituted to postpone or avoid

action. In order to cool off agitation and temper on the part of employees, the matter

may be referred to a committee. Delaying of action through a committee is a strategy for

overcoming resistance, pressure or opposition from affected people.

Disadvantages:

1. Indecisiveness: In general, it takes longer to get decision or action from a

committee than from an individual. Members of a committee tend to indulge in lengthy,

discussions. Every member has the right to speak and be heard. Matters are

unnecessarily dragged. Opinion is divided and decisions get delayed. Group decision

processes are not appropriate where prompt action is required. Due to conflicting view-

points, a committee fails to reach a decision in time.

2. High costs: A lot of expenditure and time is incurred in convening meetings and

giving travelling or other allowance to members. Therefore, committees are an

expensive form of administration. As such a committee should be appointed only when

the gains of committee work justify the s costs. Committee work is very time-consuming.

3. Compromised decisions: Committee decisions are often mediocre compromises

between conflicting viewpoints. The ultimate decisions may reflect the opinion of none

so that there is little enthusiasm for them. Individual thinking is expected to conform to

the average or group thinking. Such leveling effect or log-rolling reduces the quality of

decision. The compromise is often arrived at the least common denominator. Therefore,

committee decisions are not necessarily the best decisions but merely acceptable ones.

4. Diffused responsibility: No member can be individually held responsible for a

wrong decision taken by a committee. As no one feels accountable for results, members

shirk their responsibilities. The committee becomes an organized means of passing the

buck. According to committees do not necessarily increase the democratic process

administration.

5. Domination by few: A few aggressive or vocal members often dominate

committee's deliberations. A minority group exercises an unwarranted tyranny ignoring

the interest of other members. Members frequently seek to protect their narrow

sectional interests. There is a tendency to cloud the real issues and bring in extraneous

matters for discussion often a committee becomes a battle-ground for warring camps to

settle personal scores.

6 Perpetuation: Committees have a tendency to perpetuate themselves even after the

purpose is served. There exist too many committees even for routine problems.

Sometimes committees are appointed to just avoid actions. Such committees serve no

useful purpose and the aggrieved people remain aggrieved. It is often difficult to

dissolve a committee even when it has outlived its utility.

7. Lack of secrecy: It is difficult to maintain secrecy regarding the decisions and

actions taken by a committee. A large number of persons participate in committee

meetings.

Due to its weaknesses and misuse, a committee has been described as "a group of unfits

engaged by the unwilling to do the unnecessary." Some people remark that a committee

is a group of people who individually can do nothing but who can meet together and

decide that nothing can be done. Such remark reflects wide-spread frustration and dis-

illusionment with committees.

Reasons for Using Committee:

1. Multi mgmt. Issues: Certain issues need multi-management approach in solving

them. Committees are used to deal with such issues.

2. Expertise: Committees are used to have the expertise of various managers in

making decisions

3. Team Approach: Committes are used when the execution is to be done through/by

teams.

4. Innovativeness/Creativity: Committees are used when the business or

managerial activity needs innovation in problem solving.

5. Nobody to bell the cat: Committes are used when no one in the company wants to

take the risk or responsibility of dealing with a particular issue or person.

6. Delay the decisions: Management wntrust the decisions to the committee when it

would like to delay the decision-making.

7. Strategic/Critical Issues: Management committees to deal with the strategic and

critical issues.

Steps to Committee Success

A Committee is only as strong as its members and its chair. To the first part - the chair.

BE ORGANIZED! Know what you are doing. Get good members. To the members -

take ownership and make it work. Very often committees turn into either mini social

event where two people are working in a corner while the rest watch a football game, or

no one shows up. Poor planning and committee member involvement are often the

causes of such actions.

Here’s a secret….whether you are running the social committee or the CHAPTER

MEETING - these philosophies below apply!

1) Know and understand the purpose of your committee. You cannot sell

others (either your committee members or the student body) on a committee or idea you

are not sold on yourself.

2) Instruct your committee members as to their duties and responsibilities.

Unless you can create a strong "team spirit" among your members, your committee will

be a failure. Make each member feel his individual responsibility. Ideas on how to do

this may include complimenting, delegating, and recognizing contributions. Always

keep the committee informed of any new developments.

3) Set a regular meeting time and place. A committee that meets haphazardly is

usually doing haphazard work. If you set a time and place early and make good use of

that time, your members will keep that time clear. At your first meeting you should

distribute your meeting schedule to all members.

4) Start on time. Arrive at the meeting ahead of time to be sure that the room is

arranged. Make sure pencils, paper and other necessities are available for the group's

convenience. If you make it a point to start on time, your members will make it a point

to be there on time.

5) If you call special meetings, notify every member as early as possible.

Meeting with small groups or leaving a member out of a discussion causes hard feelings

and ruins the "team spirit." Include everyone every time.

6) Plan a definite agenda for every meeting. Think through every meeting in

advance. Prepare copies giving an outlined agenda of what business is to be discussed.

Review agenda prior to every meeting during your scheduled meetings with your

advisor and vice president.

7) Be flexible in the presentation of ideas. Encourage members to be creative

and express their ideas. Stimulate the discussion and let them solve the problem by

combining the ideas of the entire group.

8) Make definite assignments. Divide the work and give definite assignments.

Give them the needed help and encouragement. Check with them between meetings to

avoid trouble in the area of planning and execution.

9) Follow-up is the key to success. Check with the members who have been given

definite assignments. Then hold each person responsible for carrying out his job. A

good chairman does not do all the work himself.

10) Go easy on Vitamin "I". By dividing the committee work among the members,

you eliminate a major part of the burden from your own shoulders and you train future

leaders of SAE(Society Automotive Engeneers).

11) Have your secretary keep minutes of every meeting. The minutes should be

submitted to the Vice President and Advisor during their regularly scheduled meeting.

12) Evaluate your work at regular intervals. Your committee should honestly

review and evaluate every activity you plan and carry out. Frequently you should go

back to your basic purpose and account for your total program.

Assess the committee's success. It is a good idea when you chair a committee to

check in periodically with members and how they are doing. Since you have been in

contact with them, you should be able to ask them if they feel confident in their roles,

and if not, ask what help they need to do their jobs.

13) Show your appreciation. If your committee does a good job, your members

deserve some kind of reward. Their only compensation is the satisfaction of doing a

good job-- and the appreciation they get from their fellow committee members. A good

chairman will learn to say "thanks" in as many ways as possible. A pat on the back,

recognition in meetings, a short notice, or a sincere "thank you for helping" can do a lot

toward building morale.