LINE/STAFF AUTHORITY, EMPOWERMENT, AND DECENTRALIZATION

AUTHORITY AND POWER

Power is the ability of individuals or groups to induce or influence the beliefs or actions of other persons or groups. Authority is the right in a position to exercise discretion in making decisions affecting others.

DIFFERENT BASES OF POWER

Legitimate power normally arises from position and derives from our cultural system of rights, obligations, and duties whereby a position is accepted by people as being legitimate. Expert power is the power of knowledge. Referent power is influence that people or groups may exercise because people believe in them and their ideas.

DIFFERENT BASES OF POWER CONT

Reward power is the power to grant or withhold rewards, such as high grades given by a university professor. Coercive power is closely related to reward power and normally arises from legitimate power; it is the power to punish.

WHAT IS EMPOWERMENT?
Employees, managers, or teams at all levels in the organization have the power to make decisions without asking their superiors for permission. Power should be equal to responsibility (P=R) If power is greater than responsibility (P>R), then this could result in autocratic behaviour of the supervisor If responsibility is greater than power (P<R), then this could result in frustration

THE BASIS OF FORMAL AUTHORITY: TWO VIEWS

A Classical View: Authority originates at some very high level, and then is lawfully passed down form level to level. At the top of this hierarchy may be God, King, Elected President, or the collective will of the people. According to the classical view of formal authority in organizations, management has a right to give lawful orders and employees have an obligation to obey. This obligation is, in effect, self-imposed.

THE BASIS OF FORMAL AUTHORITY: TWO VIEWS (CONT.)

The Acceptance View: The basis of authority lies with the influencee rather than the influencer. This view starts with the observation that not all legitimate laws or commands are obeyed in all circumstances. The key point is that the receiver decides whether or not to comply.

ACCEPTANCE VIEW

1. 2.

3.

4.

Chester Barnard, a strong proponent of the acceptance view, has defined the conditions under which a person will comply with higher authority: He can understand the communication At the time of decision he believes that it is consistent with the purpose of the organization At the time of decision he believes it to be compatible with his personal interest as a whole He is able mentally and physically to comply with it

SCALAR PRINCIPLE IN ORGANIZATION

The clearer the line of authority from the ultimate management position in an enterprise to every subordinate position, the clearer will be the responsibility for decision making and the more effective will be organizational communication.

LINE, STAFF, AND FUNCTIONAL AUTHORITY

Line authority is the relationship in which a superior exercises direct supervision over a subordinate.
Line authority is based primarily on legitimate power. The activities classified in line will differ in each organization as it is identified in terms of companys goals.

Staff relationship is advisory.

Staff authority is primarily based on expert power.

LINE, STAFF, AND FUNCTIONAL AUTHORITY

Functional authority is the right delegated to an individual or a department to control specified processes, practices, policies, or other matters relating to activities undertaken by persons in other departments.
In reality, staff departments especially those responsible for audit functions, may have formal authority over line managers within the limit of their functions Thus it is based on both legitimate power and expert power.

LINE & STAFF AUTHORITY

Line Authority
Advantages:

Staff Authority
Advantages:

Everything kept Simple Authority relationship graphically illustrated by hierarchy Close to employees so decisions can be made quickly Neglects advisers

Uses the best experts Frees line managers for day-to-day activities Can be used as screening and training for future line managers Confusing to some employees

Disadvantages:

Disadvantages:

Too many decisions to make in short time period

Requires very skilled managers

Creates line-staff conflicts

Places staff in submissive role

DECENTRALIZATION OF AUTHORITY

Decentralization is the tendency to disperse decision-making authority in an organized structure.

CENTRALIZATION & DECENTRALIZATION AS

TENDENCIES
Complete centralization (no organization structure) Complete decentralization (no organization structure)

Authority delegated

Authority not delegated

DIFFERENT KINDS OF CENTRALIZATION

1. Centralization of performance pertains to geographic concentration; it characterizes, for example, a company operating in a single location. 2 Departmental centralization refers to concentration of specialized activities, generally in one department. For example, maintenance for a whole plant may be carried out by a single department. 3. Centralization of management is the tendency to restrict delegation of decision making. A high degree of authority is held at or near the top.

DELEGATION

Delegation: The act of assigning formal authority and responsibility for completion of specific activities to a subordinate.

THE PROCESS OF DELEGATION INVOLVES:

Determining the results expected from a position. Assigning tasks to the position. Delegating authority for accomplishing these tasks. Holding the person in that position responsible for the accomplishment of the tasks.

PERSONAL ATTITUDES TOWARD DELEGATION

Receptiveness Willingness to let go Willingness to allow mistakes by subordinates Willingness to trust subordinates Willingness to establish and use broad controls

OVERCOMING WEAK DELEGATION

1.

2. 3. 4.

5.

Define assignments and delegate authority in light of results expected. Select the person in light of the job to be done. Maintain open lines of communication. Establish proper controls. Reward effective delegation and successful assumption of authority.

RECENTRALIZATION OF AUTHORITY AND BALANCE AS THE KEY TO DECENTRALIZATION Recentralization Centralization of authority that was once decentralized; normally not a complete reversal of decentralization, as the authority delegated is not wholly withdrawn.

ADVANTAGES & LIMITATIONS OF DECENTRALIZATION

Advantages Relieves top management of some burden of decision making. Encourages decision making & assumption of authority. Gives manager more freedom in decision making. Promotes establishment & use of broad controls. Makes comparison of performance of different organizational units possible. Facilitates setting up profit centers. Facilitates product diversification. Promotes development of general managers. Aids in adaptation to fast-changing environment.

ADVANTAGES & LIMITATIONS OF DECENTRALIZATION (CONT)

Disadvantages Makes it more difficult to have a uniform policy Increases complexity of co-ordination of decentralized organizational units. May result in loss of some control by upper level managers. May be limited by inadequate control techniques. May be constrained by inadequate planning & control systems. Can be limited by the lack of qualified managers. Involves considerable expenses for training managers. May be limited by external forces. May not be favoured by economies of scale of some operations.

CENTRALIZATION

The extent to which important decisions that can affect the performance and decisions of others are retained in the hands of one or a few persons indicated centralization of authority in an organization.

ADVANTAGES: APPROPRIATE DELEGATION

The task/job goes to the right person. Speeding up of decision, task performance & response to the demands of the changing business environment. The skill and competence of the staff to whom the responsibility is delegated improves. When the person to whom tasks are delegated are supported & rewarded appropriately, it enhances their motivation and confidence, commitment & involvement. The manager who delegated the task to some one else is freed up for more important or serious jobs.

LIMITATIONS: INADEQUATE / INAPPROPRIATE

DELEGATION

The person accepting responsibility needs to have the required ability & willingness to perform. Success of delegation also requires co-ordination among other performing staff & other organizational arrangements. Even if the staff is skilled, if the trust between the superior and the subordinate is missing, then there may be too little delegation and its acceptance. Too much of the delegation is same as the superior abdicating his or her responsibility and making the junior do what actually needs the superior's involvement, too little delegation slowed down decision. Managers doing other tasks still need to be available when the juniors need their support.