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Bureaucracy: Centralization & Decentralization
ByGROUP-8Debojit Roy – H66Sritanu Das Mahapatra – H57Abhisek Sahu – H3Krishnakant Pandey – H25Biswajit Ghosh – H12
ORGANISATION STRUCTURE
• A social unit deliberately constructed to seek specific goals
• Characterised by: planned divisions of responsibility power centres to control its efforts an explicit hierarchy and a well defined structure a communication network
• All organisations are ‘goals led open systems’
Six key elements to be addressed when designing structure:
• Work Specialisation• Departmentalisation• Chain of Command (Scalar Chain)• Span of Control (Number of subordinates reporting
directly to a manager or supervisor.)• Centralisation and Decentralisation• Formalisation
ORGANISATIONAL STRUCTURE - KEY TERMS
• Formalisation - The degree to which jobs within the organization are standardized.
• Specialisation - degree to which tasks are divided into separate jobs
• Centralisation - describes the locus of decision making in the organisation; centralised organisations are characterised by a concentration of decision making at the top of the management hierarchy
• Departmentalization - The basis by which jobs are grouped together.
ORGANISATIONAL STRUCTURE - KEY TERMS
• Chain of Command - The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom.
• Decentralization - The degree to which decision making is spread throughout the organization.
Bureaucracy
• A structure of highly operating routine tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command.
Hierarchy Tall and flat forms Span of control Time span of discretion
Bureaucratic structure
CLASSICAL APPROACH• Emphasis on purpose, formal structure, hierarchy of
management, technical requirements and common principles of organisation.
• This perspective was concerned with structuring organisations effectively.
• Two major sub-groupings of this approach are:– Bureaucracy– Scientific Management (sometimes categorised as an
approach in its own right)
CLASSICAL APPROACH
Major Contributors:
Henri Fayol
Linda Urwick
Max Weber – most
prominent of the three.
• Weber proposed a bureaucratic form of structure that he believed would work for all organisations.
Max Weber 1864-1920
• German sociologist
• Taught law, political economy and economics
• Professor of sociology Vienna 1918
• conservative liberal - known for "Die Protestants Ethic und der Geist des Kapitalismus 1930" - debate with (the spirit of) Marx about idealism vs. structural materialism.
• Classical underpinning for organisational studies: Gouldner, Etzioni, Burns & Stalker, Mintzberg, Kanter .......
CLASSICAL APPROACH
Weber’s Ideal Bureaucracy
• Job Specialisation• Authority Hierarchy• Formal Selection• Formal Rules and
Regulations• Impersonality• Career Orientation
Criticisms of Bureaucracy
• Lack of attention to the informal organisation.
• Restriction of psychological growth
• Bureaucratic dysfunction
TALL STRUCTURES: Thought by classical theorists to be
inefficient because of:• Increased overheads• Communication problems• Ill defined management roles• Duplication of effort• Planning and co-ordination problems• However, a contemporary view is that tall
structures may facilitate team working, with all its attendant benefits
FLAT STRUCTURES:
• Result in delegation (motivational)
• Facilitate communication
• Clarify management hierarchies
• Result in meaningful progression for employees (less frequent promotions, but greater increases in authority between levels)
Flat Tall
In order to work, a flatstructure requires thorough training
for staff at each level
Tall or Flat Bureaucracy?
Tall bureaucracy If tasks are high in
ambiguity If the time span of
discretion of the top job is very long (20 yrs 7 levels)
Flat bureaucracy-make as flat as possible, especially if
jobs are very standardized
decisions are decentralized
If the time span of discretion of the top job is short (1 yr 3 levels)
Note: time span of discretion = how long it takes to see the outcomes of your decisions
SPAN OF CONTROL• Basic building block of organisational
structure
• Simply - number of subordinates who report to each manager
• 1 - 10: narrow span
• 11+: wide span
• Determines whether the organisation has a TALL or a FLAT structure
SPAN DETERMINED BY:
• Manager’s ability• Subordinates’ abilities• Similarity of subordinates’ work• Nature of potential problems• Amount of ‘self help’ available to subordinates• Nature of controls required• Availability of managerial support
1
4
16
64
256
1,024
4,096
(highest) 1
8
64
512
4,096
1
2
3
4
5
6
7
orga
nis
atio
nal
leve
lMembers at each level
ASSUMING SPAN OF 4 ASSUMING SPAN OF 8
Operatives: 4,096 Operatives: 4,096 Managers (levels1-6): 1,396 Managers (levels1-4): 585 Ratio of 1:4 Ratio of 1:8
Levels and span of control
Centralisation and Decentralised
Centralisation and Decentralised
• Centralisation - refers to the concentration of authority and responsibility for decision making in the hands of managers at the top of an organisation.
• Decentralisation - refers to authority and responsibility for decision making being dispersed more widely downwards and given the to operating units, branches and lower-level managers.
CENTRALISATION
• Senior mgt can exercise greater control• Procedures can be centralised for
organisation as a whole• Decisions can be taken from a global
perspective• Easier to maintain ‘balance’ between
departments and functions• Senior mgt more experienced decision
makers• Centralised management better in times of
crisis
DECENTRALISATION• Reduced stress and burden on senior
management.• Greater job satisfaction for subordinates• Subordinates may have better ‘local’
knowledge• Delegation increases flexibility and
responsiveness to change• Decentralisation can be used to train
managers• Decentralisation may lead to improved control
DifferenceDifference
• Centralised– greater uniformity in
decisions;– more control;– fewer skilled
managers required;– Less extensive plan
and reporting procedures;
– Faster decision process.
• Decentralised– Lower-level decisions
are easier;– Lower-level
management problems can be dealt on the spot;
– Greater motivation and better opportunities for lower-level managers;
– Top-level managers have more time for strategic planning.
Examples
• Centralized Structure:
Tata Telesrvice Ltd.
• Decentralized Structure:
Infosys.
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