Principles of management

Unit 3

Organizing:
“Organising” is the function of gathering resources, establishing orderly uses for such
resources and structuring tasks to fulfil organizational plans. It includes the determination of
what tasks are to be done, how the tasks are to be grouped, who is going to be responsible
to do these tasks and who will make decisions about these tasks.
A definition of organisation suggested by Chester Barnyard, an organisation is “a system
of consciously coordinate activities or efforts of two or more persons.”

Nature:
1. Division of Work: Under division of work the entire work of business is divided into
many departments. The work of every department is further sub-divided into sub-
works.
2. Coordination: Under organizing different persons are assigned different works but the
aim of all these persons happens to be the some - the attainment of the objectives of
the enterprise. It is thus, clear that it is in the nature of an organization to establish
coordination among different works, departments, and posts in the enterprise.
3. Plurality of Persons: Organization is a group of many persons who assemble to fulfil a
common purpose. A single individual cannot create an organization.
4. Common Objectives: There are various parts of an organization with different
functions to perform but all move in the direction of achieving a general objective.
5. Well-defined Authority and Responsibility: Under organization a chain is established
between different posts right from the top to the bottom. It is clearly specified as to
what will be the authority and responsibility of every post.
6. Structure of Relationship: Relationship between persons working on different posts in
the organization is decided.
7. Universal Process: Organization is needed both in business and non-business
organizations. Not only this, organization will be needed where two or mom than two
people work jointly. Therefore, organization has the quality of universality.
Purpose:
1. Efficient Administration: A properly designed organisation facilitates administration.
2. Prompt Accomplishment: It adds definiteness to the activities to be accomplished by
allocating the duties and responsibilities to the individual members of the enterprise.
3. Growth and Diversification: It promotes growth and facilitates diversification.
Expansion of business and diversification of production process depend on sound
organisation.
4. Optimum Use of Advanced Technology: Present technical development greatly
influences the need for more adequate organisation structure and for understanding
the proper form of organisation best designed to accommodate the new factors.
5. Stimulating Creativity: Good organisation stimulates independent creative thinking
and initiative by providing well-defined areas of work with provision for development
of new and improved ways of doing things.

Principles of Organization:
1. Principle of Objective:
The enterprise should set up certain aims for the achievement of which various departments
should work. A common goal so devised for the business as a whole and the organization is
set up to achieve that goal. In the absence of a common aim, various departments will set up
their own goals and there is a possibility of conflicting objectives for different departments.
So, there must be an objective for the organization.
2. Principle of Specialisation:
The organization should be set up in such a way that every individual should be assigned a
duty according to his skill and qualification. The person should continue the same work so
that he specialises in his work. This helps in increasing production in the concern.
3. Principles of Co-ordination:
The co-ordination of different activities is an important principle of the organization. There
should be some agency to co-ordinate the activities of various departments. In the absence
of co-ordination there is a possibility of setting up different goals by different departments.
The ultimate aim of the concern can be achieved only if proper co-ordination is done for
different activities.
4. Principle of Authority and Responsibility:
The authority flows downward in the line. Every individual is given authority to get the work
done. Though authority can be delegated but responsibility lies with the man who has been
given the work. If a superior delegates his authority to his subordinate, the superior is not
absolved of his responsibility, though the subordinate becomes liable to his superior. The
responsibility cannot be delegated under any circumstances.
5. Principle of Definition:
The scope of authority and responsibility should be clearly defined. Every person should know
his work with definiteness. If the duties are not clearly assigned, then it will not be possible
to fix responsibility also. Everybody’s responsibility will become nobody’s responsibility. The
relationship between different departments should also be clearly defined to make the work
efficient and smooth.
6. Span of Control:
Span of control means how many subordinates can be supervised by a supervisor. The
number of subordinates should be such that the supervisor should be able to control their
work effectively. Moreover, the work to be supervised should be of the same nature. If the
span of control is disproportionate, it is bound to affect the efficiency of the workers because
of slow communication with the supervisors.
7. Principle of Balance:
The principle means that assignment of work should be such that every person should be
given only that much work which he can perform well. Some person is over worked and the
other is under-worked, then the work will suffer in both the situations. The work should be
divided in such a way that everybody should be able to give his maximum.
8. Principle of Continuity:
The organization should be amendable according to the changing situations. Everyday there
are changes in methods of production and marketing systems. The organization should be
dynamic and not static. There should always be a possibility of making necessary adjustments.
9. Principle of Uniformity:
The organization should provide for the distribution of work in such a manner that the
uniformity is maintained. Each officer should be in-charge of his respective area so as to avoid
dual subordination and conflicts.
10. Principle of Unity of Command:
There should be a unity of command in the organization. A person should be answerable to
one boss only. If a person is under the control of more than one person then there is a like-
hood of confusion and conflict. He gets contradictory orders from different superiors. This
principle creates a sense of responsibility to one person. The command should be from top
to bottom for making the organization sound and clear. It also leads to consistency in
directing, coordinating, and controlling.
11. Principle of Exception:
This principle states that top management should interfere only when something goes wrong.
If the things are done as per plans, then there is no need for the interference of top
management. The management should leave routine things to be supervised by lower cadres.
It is only the exceptional situations when attention of top management is drawn. This
principle relieves top management of many botheration and routine things. Principle of
exception allows top management to concentrate on planning and policy formulation.
Important time of management is not wasted on avoidable supervision.
12. Principle of Simplicity:
The organizational structure should be simple so that it is easily understood by each and every
person. The authority, responsibility and position of every person should be made clear so
that there is no confusion about these things. A complex organizational structure will create
doubts and conflicts among persons. There may also be over-lapping’s and duplication of
efforts which may otherwise be avoided. It helps in smooth running of the organization.
13. Principle of Efficiency:
The organization should be able to achieve enterprise objectives at a minimum cost. The
standards of costs and revenue are pre-determined and performance should be according to
these goals. The organization should also enable the attainment of job satisfaction to various
employees.
14. Scalar Principle:
This principle refers to the vertical placement of supervisors starting from top and going to
the lower level. The scalar chain is a pre-requisite for effective and efficient organization.
Organizational Structure:
Organizational structure refers to the way in which the roles, responsibilities, authority, and
communication are arranged within an organization. It defines how tasks are divided,
grouped, and coordinated, and establishes the relationships between various parts of the
organization. Here is an overview of different types of organizational structures:
1. Functional Structure: In a functional structure, the organization is divided into
departments based on specific functions such as marketing, finance, HR, and production.
Each department is managed by a department head who reports to a higher level of
management, often a functional or general manager.
• Advantages:
o Specialization: Employees become experts in their specific areas, leading to
increased efficiency and expertise.
o Clear Hierarchy: Defined roles and clear reporting lines within departments
simplify management and supervision.
o Operational Efficiency: Streamlined processes within functions lead to cost
savings and effective resource utilization.
• Disadvantages:
o Silos: Departments may become isolated, leading to poor communication and
coordination across functions.
o Limited Flexibility: Adaptation to change may be slow as each department
focuses primarily on its own objectives rather than overall organizational goals.
2. Divisional Structure: This structure divides the organization into semi-autonomous
divisions, each focused on a specific product line, market, or geographic region. Each division
operates as a separate entity with its own resources, including its own functional
departments.
• Advantages:
o Focus: Each division can focus on its specific product, market, or region, leading
to greater responsiveness to local needs and market conditions.
o Flexibility: Divisions operate independently, making it easier to adapt strategies
to local or product-specific challenges.
o Accountability: Performance of each division can be evaluated separately,
enhancing accountability and performance management.
 • Disadvantages:
o Duplication: Resources and efforts may be duplicated across divisions, leading
to inefficiencies.
o Higher Costs: Separate divisions may result in higher operational costs due to
the duplication of functions and resources.
3. Matrix Structure: The matrix structure combines functional and divisional approaches,
creating dual reporting relationships. Employees report to both a functional manager and a
project or product manager. This structure is designed to improve flexibility and
communication across the organization.
• Advantages:
o Collaboration: Encourages collaboration and information sharing between
different functional areas and project teams.
o Flexibility: Can quickly adapt to changing project requirements and market
conditions.
o Resource Utilization: Efficient use of resources across different projects and
functions.
• Disadvantages:
o Complexity: Dual reporting lines can create confusion and conflicts regarding
authority and responsibilities.
o Management Challenges: Requires strong management and communication
skills to resolve conflicts and manage resources effectively.
4. Flat Structure: Features fewer hierarchical levels between employees and management,
with a wide span of control. This structure promotes a more informal and collaborative work
environment.
• Advantages:
o Increased Employee Involvement: Employees often have more direct access to
management and a greater say in decision-making processes.
o Faster Decision-Making: Fewer layers of management can lead to quicker
decisions and a more agile organization.
o Reduced Bureaucracy: Less formal hierarchy can lead to a more flexible and
responsive organization.
 • Disadvantages:
o Role Ambiguity: With fewer layers of management, roles and responsibilities
may become less clear, leading to potential confusion.
o Management Strain: Managers may have a larger number of direct reports,
which can be challenging to oversee effectively.
5. Hierarchical Structure: The traditional pyramid-shaped structure with multiple levels of
management. Each level in the hierarchy has clearly defined authority and responsibilities,
with lower levels reporting to higher levels.
• Advantages:
o Clear Chain of Command: Well-defined roles and reporting lines help in
managing and supervising employees effectively.
o Structured Communication: Provides a clear path for communication and
decision-making from top to bottom.
o Predictability: Stable and predictable, with established processes and
procedures.
• Disadvantages:
o Rigidity: Can be inflexible and slow to adapt to changes due to its rigid
hierarchical nature.
o Communication Delays: Information may take time to flow through multiple
layers, leading to potential delays in decision-making.
6. Team-Based Structure: Organizes employees into teams that work on specific projects or
tasks. Teams are often cross-functional and have a high degree of autonomy.
• Advantages:
o Enhanced Collaboration: Promotes teamwork and collaboration across different
functional areas.
o Flexibility: Teams can quickly adapt to changing project needs and market
conditions.
o Empowerment: Employees often have more control and responsibility within
teams, leading to higher engagement and motivation.
• Disadvantages:
o Conflict Potential: Teams may experience conflicts or competition for resources
and recognition.
 o Coordination Efforts: Requires effective coordination and communication
among teams to avoid duplication of efforts and ensure alignment with
organizational goals.
7. Network Structure: Relies on a central organization that outsources various functions to
external partners, contractors, or suppliers. The central organization focuses on core
competencies while leveraging external expertise.
• Advantages:
o Flexibility and Scalability: Easily scalable and adaptable to changes in demand
or market conditions.
o Access to Expertise: Allows access to specialized skills and resources that may
not be available internally.
o Cost Efficiency: Reduces the need for extensive internal resources and
infrastructure.
• Disadvantages:
o Dependency: Creates dependency on external partners, which can be risky if
those partners face issues.
o Coordination Challenges: Requires effective management and coordination to
ensure alignment and integration of external and internal efforts.
8. Circular Structure: Arranges employees in a circular format with higher-level employees at
the center and lower-level employees on the outer rings. The structure is designed to
promote open communication and collaboration.
• Advantages:
o Enhanced Communication: Encourages more open and direct communication
across different levels of the organization.
o Inclusivity: Promotes a sense of equality and involvement among employees, as
there are fewer hierarchical barriers.
• Disadvantages:
o Management Complexity: Can be challenging to manage due to its less
traditional approach and potential for role ambiguity.
o Scalability Issues: May be less effective for larger organizations or those with
complex operations.
9. Process-Based Structure: Organizes employees around processes rather than functions or
products. Focuses on optimizing end-to-end processes to enhance efficiency and
effectiveness.
• Advantages:
o Process Efficiency: Improves the efficiency of processes and reduces bottlenecks.
o Customer Focus: Can lead to better alignment with customer needs by focusing
on process outcomes.
• Disadvantages:
o Overlap and Confusion: Processes may overlap, creating confusion regarding
roles and responsibilities.
o Complex Implementation: Requires significant changes to existing systems and
processes.
10. Holacratic Structure: A decentralized approach where decision-making is distributed
throughout self-organizing teams or "circles," with flexible roles and responsibilities.
• Advantages:
o Agility and Innovation: Encourages innovation and quick adaptation to changes
with empowered teams.
o Employee Empowerment: Provides employees with more control and
responsibility, leading to higher engagement.
• Disadvantages:
o Implementation Challenges: Can be complex to implement and requires a
strong commitment to transparency and effective communication.
o Role Ambiguity: May lead to confusion about roles and decision-making
authority.

Organizational Design:
Organizational design is a step-by-step methodology which identifies dysfunctional aspects
of work flow, procedures, structures, and systems, realigns them to fit current business
realities/goals and then develops plans to implement the new changes. The process focuses
on improving both the technical and people side of the business.
As companies grow and the challenges in the external environment become more complex,
businesses processes, structures and systems that once worked become barriers to efficiency,
customer service, employee morale and financial profitability. Organizations that do not
periodically renew themselves suffer from such symptoms as:
▪ Inefficient workflow with breakdowns
▪ Redundancies in effort (“we don’t have time to do things right, but do have time to do
them over”)
▪ Fragmented work with little regard for good of the whole (Production ships bad parts
to meet their quotas)
▪ Lack of knowledge and focus on the customer
▪ Silo mentality and turf battles
▪ Lack of ownership (“It’s not my job”)
▪ Cover up and blame rather than identifying and solving problems
▪ Delays in decision-making
▪ People do not have information or authority to solve problems when and where they
occur
▪ Management, rather than the front line, is responsible for solving problems when
things go wrong
▪ It takes a long time to get something done
▪ Systems are ill-defined or reinforce wrong behaviors
▪ Mistrust between workers and management

This approach to redesign, results in dramatic improvements in quality, customer service,

decreased cycle times, lower turnover and absenteeism, productivity gains, etc. It can be used
in most any type and size of business. The length of time required to complete a redesign
varies depending on the nature, size, and resources of the organization. Large and complex
redesign projects can be completed within several days. Smaller organizations require much
less time and fewer resources.
Line Authority:
Line of organisation is superior-subordinate relationship. Superior delegates authority to
another subordinate and so on, forming a line from the very top to the bottom of the
organisation structure. The line of authority so established is referred as “line authority.”
Under this type of organisation authority flows downwards, responsibility moves upwards in
a straight line. Scalar principle and unity of command are strictly followed in line organisation.

Characteristics:
1. Orders and instructions flow from top to the bottom, whereas requests and
suggestions move from bottom to top.
2. The principle of unity of command is the most salient feature of this type of
organisation. In simple words, the orders are received by the subordinates from one
boss.
3. The subordinates are accountable to their immediate superior.
4. There are limited numbers of subordinates under one superior.
5. This is simple to operate and control.
6. Co-ordination can be easily achieved.

Advantages:
1. Simplicity: It is very simple to establish and operate. It can be easily understood by the
employees.
2. Fixed responsibility: Duties and responsibilities are clearly defined for each individual with
reference to the work assigned to them.
3. Discipline: Singleness of responsibilities facilitates discipline in the organisation. The
workers at the lower levels will be more loyal and responsible to one single boss rather than
to a number of bosses.
4. Flexibility: It is flexible in the sense that it is subject to quick adjustments to suit to changing
conditions.
5. Co-ordination: All the activities pertaining to single department are controlled by one
person.
6. Direct communication: As there will be direct communication between the superior and
the subordinates at different levels it would be helpful in achieving promptness in
performance.
7. Unity of command: Every worker is accountable to one boss in the department under this
type of organisation.
8. Economical: It is simple and economical in operation. It does not need any expert and
specialised personnel.
9. Quick decisions: On account of its simple operation and unified control and responsibility,
decisions can be taken promptly.
10. Executive development: The department head is fully responsible for every activity in his
department. He discharges his responsibilities in an efficient manner.

Disadvantages:
1. Overloading: The work may not be performed effectively on account of innumerable tasks
before the single executive.
2. Lack of specialization: On account of many functions and complexities it is very difficult for
a single individual with narrow specialization to control all the matters effectively. The
executive may not be expert in all aspects of managerial activities.
3. Scope for favouritisms: There may be a good deal of favouritism and nepotism under this
type of organization as the concerned officer will judge the performance of the persons at
work according to his own norms.
4. Lack of co-ordination: In reality it is very difficult to achieve proper coordination among
various departments operating in an organisation. This is because each departmental
manager or head carries the functioning of his department in accordance with the ways and
means suitable to him.
5. Lack of initiative: Ultimate authority lies in the hands of top management and
departmental managers or heads have little powers. This adversely affects their initiative and
enthusiasm to motivate the subordinates working under them.
6. Lack of communication from lower ranks: Under line organisation suggestions move from
down to upwards the superiors usually do not pay attention to suggestions sent by lower
ranks. This leads to inadequacy of communication from subordinates to superiors.
Staff Authority:
Staff authority refers to the right to advise, support, and assist those with line authority
(i.e., those who have the authority to make decisions). While individuals with staff authority
can provide expertise, suggestions, and recommendations, they generally do not have the
authority to make final decisions or direct the activities of line personnel. Instead, their role
is to influence and provide key information to help those with line authority make better-
informed decisions.
Staff authority is exercised by the specialists over the line managers who advise them
on important matters. These specialists stand ready with their specialty to serve line mangers
as and when their services are called for, to collect information and to give help which will
enable the line officials to carry out their activities better. The staff officers do not have any
power of command in the organization as they are employed to provide expert advice to the
line officers. The 'line' maintains discipline and stability; the 'staff' provides expert
information. The line gets out the production, the staffs carry on the research, planning,
scheduling, establishing of standards and recording of performance.
Types:
1. Personal Staff: This includes the personal staff attached to Line Officers. For example,
personal assistant to general manager, secretary to manager etc. The personal staff
renders valuable advice and assistance to Line Officers.
2. Specialised Staff: This category includes various experts possessing specialised
knowledge in different fields like accounting, personnel, law, marketing, etc. They
render specialised service to the organisation.
3. General Staff: This comprises of various experts in different areas who render valuable
advice to the top management on different matters requiring expert advice.
Advantages:
1. Specialisation: This type of organisation is based on planned specialisation and brings
about the expert knowledge for the benefit of the management.
2. Better decisions: Staff specialists help the line manager in taking better decisions by
providing them adequate information of right type at right time.
3. Lesser Burden on line officers: Technical problems and specialised matters are handled
by the Staff and the routine and administrative matters are the concern of Line Officers.
4. Advancement of research: As the work under this type of organisation is carried out
by experts, they constantly undertake the research and experimentation for the
improvement of the product.
5. Training for line officer: Staff services have proved to be an excellent training medium
for Line Officers.
Disadvantages:
1. Conflict between line and staff authorities: Line Officers resent the activities of staff
members on the plea that they do not always give correct advice. On other hand staff
officials complain that their advice is not properly carried out.
2. Problems of line and staff authority: Line Officers consider themselves superior to Staff
Officers. The Staff Officers object to it.
3. Lack of responsibility: As the staff specialists are not accountable for the results, they
may not perform their duties well.
4. The system is quite expensive: The appointment of experts involves a heavy
expenditure. Small and medium size organisations cannot afford such a system.
5. More reliance on staff: Some of the line officers excessively rely on the staff. This may
considerably reduce the line control.

Functional Authority:
Functional Authority is given to a line or staff manager to do a specific job. When the
job is completed, the authority is taken back.
Functional authority is given to a manager to do a specific job. This job is not his normal
job. When he is doing this new job, he may or may not do his normal job. The manager already
has a line or staff authority to do his normal job. Thus, Functional authority is an additional
authority given to him to do the new job. When this new job is completed, the functional
authority is taken away, and he has to go back to his normal job.

Characteristics:
1. Functional authority is given to a manager to perform a specific function.
2. The manager may be a line manager or a staff manager. But mostly functional authority
is given to a staff manager.
3. It is not limited to a particular department. It may even cover the full organisation.
4. It is an additional authority. It is given to a manager in addition to his normal (line or
staff) authority.
5. It is removed when the work is completed.
Advantages:
1. The specific function is given to another manager. So, the line manager can concentrate
on his regular job.
2. The specific function is performed by an expert. So, it will be done efficiently.
3. The service of the staff managers will be utilised fully for the benefit of the
organisation.
4. It is suitable for large organisations.
5. The authority and responsibility is well-defined.
Disadvantages:
1. The authority relationship violates the principle of ‘unity of command’. It creates
several bosses instead of one line authority.
2. On account of the non-application of the principle of ‘unity of control’, it is very difficult
for the top management to fix the responsibility of a particular foreman.
3. Multiplicity of experts increases the overhead expenditure. The small organisations
cannot afford to install such a system.
4. Discipline among the workers as well as lower supervisory staff is difficult to maintain
as they are required to work under different bosses
5. Appointment of several experts in the organisation creates the problem of co-
ordination and delay in decision-making.

Line and Staff conflict:

Line and staff managers are supposed to work harmoniously to achieve the
organizational goals. But their relationship is one of the major sources of conflict in most
organizations. Since such conflicts lead to loss of time and organizational effectiveness, it is
always desirable to identify the sources of such conflicts and initiate necessary action to
overcome them. Conflicts according to various viewpoint are categorized as:
Conflicts from to Line Viewpoint:
1. Lack of accountability: Line managers generally perceive that staff managers are not
accountable for their actions. Staff takes the credit for achieving the results, which is
actually achieved by the line people. But if anything goes wrong, they blame the line.
2. Encroachment on line authority: Line managers often allege that staff managers
encroach upon their authority by giving recommendations on matters that come within
their purview. Such encroachments influence the working of their departments and
often lead to hostility, resentment, and reluctance to accept staff recommendations.
 3. Dilution of authority: Staff managers often dilute the authority and be-little the
responsibilities of line managers. Line managers fear that their responsibilities may be
reduced and they even suffer from a feeling of insecurity.
4. Theoretical basis: Staff being specialists, they generally think within the ambit of their
specialization. They fail to relate their suggestions to the actual reality and are unable
to understand the actual dimensions of the problems. This is because staff is cut-off
from the day-to-day operations. This results in impractical suggestions, making it
difficult to achieve organizational goals.
Conflicts from to Staff Viewpoint:
1. Lack of proper use of staff: Staff managers allege that line managers often take
decisions without any input from them. Line just informs staff after taking decisions.
This makes staff managers feel that line do not need staff.
2. Resistance to new ideas: Line managers resist new ideas as they feel implementing
new ideas means something is wrong with the present way of working. Such rigidity of
line managers dissuades staff from implementing new ideas in the organization and
adds to their frustration.
3. Lack of proper authority: Staff often alleges that despite having the best solutions to
the problems being faced in their areas of specialization, they fail to contribute to
organizational goals. This is because the staff lack the authority to implement the
solutions and are unable to persuade the line managers (who have the authority) to
implement them.
Conflicts Due to Nature of Line and Staff Relationships:
1. Different backgrounds: Line and staff managers are usually from different
backgrounds. Normally line managers are seniors to staff in terms of organizational
hierarchy and levels. On the contrary, staff managers are relatively younger and better
educated. Staff often looks down upon the line. Such complexes create an atmosphere
of mistrust and hatred between the line and staff.
2. Lack of boundary between line and staff authority: In practice it is difficult to make a
distinction between line and staff authority. Overlapping and duplication of work
creates a gap between the authority and responsibility of line and staff. Each tries to
shift the blame to the other.
3. Lack of proper understanding of authority: Failure to understand authority causes
misunderstandings between the line and staff. This leads to encroachment and creates
conflict.
Overcoming such Conflicts:
1. Clarity in relationships:
Duties and responsibilities of both line and staff should be clearly laid down. Relationships of
staff with the line and their scope of authority need to be clearly defined. Similarly, line
managers should also be made responsible for decision making and they should have
corresponding authority for the same. Line should enjoy the freedom to modify, accept, or
reject the recommendations or advice of the staff.
2. Proper use of staff:
Line managers must know how to maximize organizational efficiency by optimizing the
expertise of staff managers. They need to be trained on the same. Similarly, staff managers
should also help the line to understand how they can improve their activities.
3. Completed staff work:
Completed staff work denotes careful study of the problem, identifying possible alternatives
for the problem, and providing recommendations based on the compiled facts. This will result
in more staff work and pragmatic suggestions.
4. Holding staff accountable for results:
Once staff becomes accountable, they would be cautious about their recommendations. Line
also would have confidence on staff recommendations, as staff is accountable for the results.

Centralization and Decentralization:

Centralization and Decentralization are two modes of working in any organization.
Centralization is a hierarchy of formal authority for making all the important decision for the
organization.
In decentralization decision making is left for the lower level of organization.

❖ The place of the decision-making authority in the hierarchy of the management i.e.
Centralized.

❖ The degree of decision-making power at the lower echelons in the organization i.e.
Decentralized.
Purpose of Centralization:
1. The organization can strictly enforce uniformity of procedures and policies.
2. It can help in the elimination of overlapping or duplicate activities and save costs.
3. The organization has a better chance of utilizing the potential of its outstanding
employees.
4. It offers a better control over the activities of the organization by ensuring consistency
in operations and uniformity in decision-making.

Purpose of Decentralization:
1. Faster decision-making and better quality of decisions
2. Improves the effectivity of managers.
3. Offers a democratic environment where employees can have a say in their governance.
4. Provides good exposure to mid and lower-level managers and creates a pool of
promotable manpower with managerial skills.
5. Since managers can see the results of their own actions, they are more driven and have
improved morales.

Span of Management or Control:

The Span of Management or control refers to the number of subordinates who can be
managed efficiently by a superior. Simply, the manager having the group of subordinates who
report him directly is called as the span of management or control.
The Span of Management or Control has two implications:

➢ Influences the complexities of the individual manager’s job

➢ Determine the shape or configuration of the Organization

The span of management or control is related to the horizontal levels of the
organization structure.
There is a wide and a narrow span of management.
1. Wider span: there will be less hierarchical levels, and thus, the organizational structure
would be flatter.
2. Narrow span: the hierarchical levels increases, hence the organizational structure
would be tall.