OCM 2 Marks Each

• The decision of decentralization largely depe’nds on the size of the unit and the approach of the administrators.
• It is a policy matter and so it can be possible only if the management decides to go for it.
• A large scale unit raises the need of decentralization.

In the formal organizational 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 organization i.e. they form informal organizational structure.

• 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.
• Although formal organization goes as per procedures, divisions and work allocations, the informal organization makes the execution more effective and harmonious and serves as a complement of formal organization.

• Under organizing, the authority and responsibility of each individual is decided. It is also decided who will report to whom.
• Divisional heads, sub-divisional heads and skill based heads are finalized and then all the heads are given power and responsibilities so that they can perform their work well.
• In addition to this, the post of each person is also clarified. His role, authority and responsibility in the organization is also decided
• Over and above all these, the power and responsibilities are divided and balanced among employees of various posts.
• Doing so gives every employee a clear picture of his roles and the contribution – he has to make to achieve business goals. Moreover, this also removes any confusion regarding every individual’s role in the organization.
• Hence, distribution of authority and responsibility is the base of an organization.

General Manager of the business unit gives power to marketing manager to incur necessary expenditure in their work area, appointment of employees, to take disciplinary actions against the employees, etc.

Accountability flows from lower level management to upper level management in the organization

In a business unit, the accounts officer can give work of writing accounts to his accountant but when the accounts are written, it is the account officer who has to check the accuracy of the work done and not the accountant.

Entrustment of responsibility, Conferment of authority and Creation of accountability.

Work efficient management, Development of employees, Motivation, Benefit of specialization, Co-ordination and Scope for expansion.

Decentralization is not possible in small size companies were business secrets are to be maintained with great vigilance. Also, if coordination is not maintained properly in business unit, decentralization fails.

In decentralization, middle and lower level employees take decision as per powers and independence given to them, hence they become efficient leaders and develop skills of future managers. Hence, …

Quick decisions, Less work load on top level, Increased motivation, Increase in management abilities, Effective control and Harmony is created.

Hierarchy, Non-scientifically taken decisions, Non-cooperation, Lack of specialization, and more work load, etc.

To assign powers to the superiors, to enable distribution of work, and to include in decision making process is called decentralization.

Authority and responsibility

The delegation of power from upper to lower level in orderly manner is known as decentralization of power.

The concentration of control of an activity or organization under a single authority is called centralization.

Matrix organization

In informal organization

Informal communication

Informal inter-relationships develop naturally when the employees work together for a common defined goal.

Informal structure, Based on human relations, Ever-changing, Universal, Informal communication, Small size, Lack of control, and Complements formal structure]

Formal organization lacks flexibility because fixed places are assigned to employees who are non-changeable or non-alterable.

Formal organization, Lacking flexibility, Delegation of power from upper to lower level, Large size, Particular relations, and Communication.

To achieve the predefined goals, the formal structure of relationship among persons and work is establishes which is known as formal organization.

In organizational units where more variety is seen in work.

Chief Executive Officer.

Functional organization is an organi¬zational structure where the structure is built on the basis of distribution of work.

Linear organization gives more importance to department than work which is its biggest limitation.

Linear organization is most favourable in small size companies where the work area is limited, and the problems of control and discipline are also limited.

The role of the General Manager is that of an administrative head in departmental organization. General Manager’s work is to ensure that the lower employees follow the task and decisions taken by the Board of Directors.

Board of Directors

On the basis of departments

Linear organization is that organization structure where there is centralization of power at the top level. The distribution of power and responsibilities is done in straight line from top to bottom.

Linear organization

Linear organization, Functional organization, Formal organization, Informal structure organization, Matrix structure Organization.

An organizational chart is prepared.

The special care to be taken while preparing list of work is that not a single task should be left out or gets repeated.

Clarification of objectives, List of functions, Departmentalization of function, To determine departmental position and abilities, Delegation of power and responsibilities, Establishment of inter relationship, and Prepare organizational chart.

Peter F. Drucker

To see whether the employee is performing his task as per the powers and responsibilities assigned to him or not.

Changes are required when there are changes or variations in the business environment, technological advancement or new discoveries.

Organizing

Planning

Because it acts as a linear structure that co-ordinates goals of business, departmental goals and goals of employees.

Goal oriented activity, Planning based, Delegation of authority, Importance to human element, Flexibility, Establishment of inter relationships, Monitoring and control, Group activities, and Controlled administrative structure.

Organizing is the process of identifying and classifying 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.

Organizing.

Planning

Delegation of authority can be for various purposes like marketing managers are given power to incur necessary expenditure in their work area, the appointment of employees, to take disciplinarian actions against the employees etc.