BCOC-132 BUSINESS ORGANISATION AND MANAGEMENT CHAPTER-12. DELEGATION OF AUTHORITY AND DECENTRALISATION

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BCOC-132 BUSINESS ORGANISATION AND MANAGEMENT CHAPTER-12. DELEGATION OF AUTHORITY AND DECENTRALISATION

WHAT IS DELEGATION

Delegation is the process of entrusting tasks and responsibilities to subordinate , accompanied by the grant of authority to carry out those tasks

DELEGATION AUTHORITY:

Delegation of authority with the necessary powers and right to perform assigned duties , including authority to make decision and acquire resources

ELEMENTS OF DELEGATION :-

a) Assignment of tasks or duties
b) Conferment of powers or authority
c) Creation of obligation, responsibility or accountability

PRINCIPLES OF DELEGATION:-

  1. Delegation by results:- task and authority are assigned with a focus on

    achieving specific outcomes

  2. Principle of competence:- delegates should be competent for the assigned tasks

  3. Principle of trust and confidence:- trust between the delegator and delegate is

    essential

  4. Principle of parity between authority and responsibility:- authority delegated

    should match level of responsibility

  5. Principle of unity of command:- each subordinate should have one accountable

    boss

  6. Principle of absolute responsibility:- responsibility cannot be delegated or

    shifted temporarily

  7. Principle of adequate communication:- open allow of information between

    superior and subordinate is crucial

  8. Principle of effective control:- delegators must ensure proper use of delegated

    authority

  9. Principle of reward:- effective delegation should be rewarded to incentivise

    responsibility

10. Principle of receptiveness:- superior should accommodate ideas from

subordinate in decision making

The Importance of delegation lies in its role in organizational function

  • Managing complexity:- delegation helps divers tasks in large and complex

    organization

  • Continuity:- it ensure smooth operations even with changes in managerial

    personnel

  • Managerial development:- delegation aids in the development of managerial

    skills

  • Burden reduction:-managers can focus on crucial matters as subordinates take

    on responsibility

  • Subordinate responsibility:- it provides a platform for subordinates to grow

    and take on higher responsibilities

  • Organizational climate:- delegation contributes to a positive and collaborative

organizational environment

BARRIERS TO EFFECTIVE DELEGATION
Barriers to effective delegation often stem from the human factors and leadership attitudes. Reluctance on the part of mangers and subordinates can impede the delegation process

REASON FOR MANAGERIAL RELUCTANCE:

  1. Lack of confidence in subordinates: mangers may hesitate if they doubt the

    competence of their subordinates, believing they can perform tasks better

  2. Doubt in subordinate’s sense of responsibility:- a manger’s lack of

    confidence in subordinate’s responsibility may hinder delegation

  3. Fear of power loss:- insecure managers fearing loss of power may resist

    delegating, especially if subordinates excel

  4. Lack of self confidence:- some managers , feeling Inadequate or lacking self

    confidence, might be hesitant to delegate , especially in organizations without professional management

REASON OF SUBORDINATES AVOIDANCE

  1. Reluctance to bear responsibility:- some subordinates prefer a controlled

    existence with minimal responsibility , avoiding tasks that come with delegated

    authority

  2. Fear of criticism:- subordinates may avoid responsibility due to the fear of

    criticism for mistakes or inefficiency

  3. Fear of inadequate resources:- concerns about insufficient resources or an

    uncooperative delegator can deter subordinates from accepting delegated tasks

  4. Lack of motivation:- a non-motivating organizational climate can discourage

    subordinates from taking on responsibilities

MEANS OF EFFECTIVE DELEGATION:

1. Improve organizational climate and management policies:- a progressive organizational culture that values personnel development creates an environment conducive to effective delegation

2. Trust in subordinates:- building trust and expressing confidence in subordinates motivates them to accept responsibilities

3. Establish clear objectives:- clarity in objectives ensure that the delegate understands what needs to be achieved

4. DeMine responsibility and authority:- clearly define the degree of authority for the job and ensure its adequacy in relation to responsibilities

5. Motivate subordinates:- internal motivation is crucial , recognizing achievements and fostering group cohesiveness encourages participative management

6. Improve communication:- open communication about organizational policies and programs enhances understanding and organizational climate

7. Provide necessary training:- train subordinates to accept delegation, and ensure mangers are skilled in efficient delegation

8. Establish adequate controls:- implement a control system that allows managers to maintain accountability without routine inspection

DECENTRALISATION

CENTRALISATION:
Centralization involves the reservation or withholding of authority by individual managers within the organization . in a centrally managed system, control and decision making are concentrated at the top levels of management. However absolute centralization is impractical as it would leave subordinates with no duties , power or authority

DECENTRALISATION:

Decentralization is the systematic effort to delegate authority to lower organizational levels, pushing decision making power to lower levels. It involves dispersing the centers of decision making throughout the organization , respecting the inherent worth and constitution of each individual . decentralization is closely related to delegation , where authority is transferred from higher to lower levels

DISTINCTION BETWEEN DELEGATION AND DECENTRALISATION

Aspects Nature

Transfer of authority

Scope and completeness Operational control

Scope of decision making Responsibility level

Necessity for management
Control over decision

Delegation
Process of systematic transfer of authority
From individual to another

Can be a complete process

Operational control by delegatee
Typically involves specific tasks or role

Between superior and subordinate
Necessary for effective management Delegation exercises operational control

Decentralization
End result of planned delegation
Systematic delegation to all units
Complete when fullest delegation occurs
Overall control by top management
Spread decision making across organization Company-wide delegation , top management to units Optional necessitated by organizational growth Overall control at top management level

MERITS AND LIMITATION OF DECENTRALIZATION:

MERITS:

  • Facilitates organizational growth:- decentralization is essential for growing and complex organization

  • Reduce executive burden:- helps reduce the burden on top executives

  • Facilitates diversification:- necessary for business expansion and diversification

  • Quick decision making:- enables quick and consultive decision making at lower

    levels

    LIMITATION:

    • Leads to disintegration:- extreme decentralization may lead to disintegration and diseconomies of scale

• Not suitable for specialized services:- in certain specialized areas like accounting and research , decentralization may be unwarranted

• Conflict:- intense decentralization may encourage competition between departments, leading to conflict

FACTORS DETERMINING THE DEGREE OF DECENTRALISATION:

  1. Size of operation:- as the organization grows , the need for decentralization increases

  2. Cost and risks of decision making:- decentralization is useful for quickening decision making , especially for routine decision

  3. Top management philosophy:- the attitude and philosophy of top executives influence the extent of decentralization

  4. Availability of managerial resources:- the degree of decentralization is limited by the availability of trained and competent managerial personnel

  5. Environmental influence:-factors like government controls , tax policies and unionism can effect the degree of decentralization

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