Q1. Discus between delegation and decentralization. Cite some of the important obstacles to effective delegation?

Answer:

Delegation is the process by which authority passes from manager to his subordinate. Delegation is the only solution to cope with the increasing work load of managers as the organisation grows. Because of the constraints of time and ability, a manager cannot perform all the tasks himself. So he delegates certain of the tasks to the subordinate and gets them done.

Delegation and decentralization of authority are closely related.Decentralization is an expansion of delegation of authority.

While in delegation authority is transferred on one to one basis from the superior to subordinate, decentralization of authority is broader in scope and involves the transfer of authority in the organisation context from top to lower levels of management in the hierarchy. Thus the greater amount of authority delegated throughout the organisation, the more decentralized the organisation is.

Basic points of difference are as below:

Basis of Difference

Delegation of Authority Decentralization

1. Nature Delegation of authority is inevitable for every organization because managers have to delegate authority to their subordinates in order to get the work done. Thus work cannot proceed in its absence.

It is not necessary to be found in every organization because it is not essential that senior officers distribute their authority throughout the organization. Thus, work can proceed in its absence.

2. Freedom in Action

Less FreedomUnder this even after delegating authority,delegator has full control on his subordinate.

More freedom.Under this most often, the delegator looses the control on his subordinate.

3. Status This is a process done as a result of division of work.

This is a result of the policies framed by higher officials.

4. Scope Delegation of Authority depicts limited distribution of authority that is why its scope is limited.

This depicts broader distribution of authority that is why its scope is broad.

5. Purpose The purpose is reduction of the workload of an officer.

The purpose is expansion of the authority in an organization.

The advantages of decentralization are similar to the advantages of delegation. Unburdening of top management, improved decision making because decisions are made closer to the scene of action, better training, morale and initiative at lower levels and more flexibility and faster decision making are some advantages of decentralization.

Importance of delegation

1) Effective Management: Effectiveness means successful accomplishment of an objective. Delegation of authority reduces the workload of a manager. Managers who practice delegation of authority are definitely better decision makers than those managers who do not delegate authority. The former ones get the benefit of the skills of their subordinates. This situation eases the attainment of

objective. As a result, the effectiveness of managers is improved.

2) Employee Development: The mental growth of a person takes place only when he has authority to take decisions. The process of delegation of authority provides the authority to take decisions to subordinates. With the given authority, managers take decisions contingent to the situations. As a result, in future they become more able to take extra responsibility.

3) Motivation of Employee: In the process of delegation of authority, both authority and responsibility are delegated to the subordinates. This situation provides liberty to work and take on part of subordinates. Gaining through this, they exhibit their talent and skill. With better performance the subordinates create a niche for themselves in the organization. Consequently, they get job satisfaction and feel motivated to perform ever better.

4) Facilities of Growth: Delegation of authority does not only develop only one person or division but facilitates the development or organization as a whole. As adequate number of able employees is available in an organization to take decisions Expansion, Modernization and Diversification of a business can be done with full confidence.

5) Basics of Management Hierarchy: Management hierarchy is inevitable to run a business organization successfully. Only because of this hierarchy, the superiors and subordinates they come in contact with each other and get an opportunity to understand one another. This hierarchy is established through the process of delegation of authority.

Under this, authority flows from top level to the bottom level. As a result, senior and subordinate links are established from top to bottom.

6) Better Coordination: Delegation of authority is a process to establish relation among responsibility and accountability. Through this, employees get clarification with regard to their powers, duties and accountability for work performance. Thus, a clear picture is delineated for all the jobs performed at various levels, which automatically establishes better coordination, the advantage of this is that neither duplicity nor overlapping of work takes place

Importance of Decentralization

1) Develops Initiative among Subordinates: Under decentralization, authorities are delegated in large amount. Authority is a kind of power which compels a person to think/contemplate or to do something new. This inculcates in him the ability to take initiative.

2) Develops Managerial Talent for Future: Under decentralization, decision making authority is given even to the lower level managers. In this way, by getting opportunities to take decisions. Knowledge and experience of all levels of managers increases. This develops talent in the managers to bear extra responsibility in the future.

3) Quick Decision Making: The burden of all managerial decision is no more confined to some limited people but is distributed among many people. This not only leads to quick decision making but also results in better decision making. All the people are well awared of the problems

faced by their unit or division and for this reason they are capable of taking the best possible and quick decisions.

4) Relief to Top Management: Under decentralization authority related to take monotonous decisions is delegated to the subordinates. As a result, top management relieves itself from trivial affairs and consequently the workload is quite reduced. This saves their valuable time which is then utilized to brighten the future of the organization and to establish coordination.

5) Facilitates Growth: Under decentralization, full liberty is given to the subordinates to take decisions. This situation inculcates a sense of responsibility among the subordinates. Thus, they make effort to achieve/show better results. This thinking gives origin to department competitiveness. In such a situation, everybody tries to perform better than the others. As a result, development of an organization is made possible.

6) Better Control: Decentralization helps to decisively evaluate the work performance at all levels and even makes possible to fix accountability. Contribution of every department for the attainment of an objective can be ascertained. This situation is just like a challenge for every department. Management adopts a good controlling policy to face this challenge

Factors influencing decentralization are as below:

1. The cost and impact of the decisions: The greater the cost involved & greater its impact on the organisation, the more likely that the decision will be made at the upper levels.

2. Company Size and rate of growth: As company size increases, need for decentralization increases.

3. Philosophy of top management: Some firms are highly centralized whereas others are highly decentralized depending on the character and philosophy of the management. The attitude, leadership style and belief of the top management have a bearing on the degree of decentralization.

4. Philosophy of the subordinate manager: The desire by the subordinate managers for independence and their willingness and initiative to assume increased responsibility can make the higher level think of decentralization.

5. Organisation Environment: The type of technological developments, market competition, socio cultural and political factors plays a dominant role in deciding the structure. In fast changing environments as of today, companies are easily choosing decentralised structures that facilitate quick responses to the environment.

Obstacles in effective delegation are as follows:

A. Superiors resistance to delegationi. The ‘I can do it myself’ fallacy: some managers

always suffer from a feeling that they alone can do the job better. Consequently two things happen. First spending time on a task that his subordinate could perform means the manager may not have enough time for other duties like policy formulation & supervision. Secondly unless the manger allows subordinates to attempt new tasks, they will not be able to develop their skills. Thus by insisting on doing things themselves managers often fail to meet their responsibility for training and growing subordinates for promotions for higher levels

ii. Lack of ability to direct: some managers become so involved in day to day operations that they neglect the broader picture. Unable to understand the long term perspective of the work flow, they do not fully realise the importance of distributing work among subordinates. Some managers deliberately do this due to their lack of confidence in their supervisory abilities.

iii. Lack of confidence in subordinates: lack of trust and confidence on subordinates abilities and skills make the manger reluctant to delegate. As a result, subordinates lose initiative and frequently seek the guidance of the bosses to know whether they are doing the things correctly.

iv. Aversion to risk: Superiors fear that his subordinates may outsmart him and eventually the latter may become a potential threat to his position.

v. Absence of selective controls: when certain duties are delegated to subordinates, the superior has to ensure proper controls in the form of feedback about performance. It gives the superior the security of knowing the problem before much damage takes place. If controls are not adequate and efficient, manager has good reason to avoid authority delegation.

vi. Lack of time: Delegation is time consuming. In particular significant time may be sent in:

Identifying what is to be delegated Establishing appropriate control/selective

procedures Briefing and training the subordinates

Delegation is like a capital investment; time spent setting it up may achieve substantial dividends-only in future. If the managers don’t carefully think through the pattern of delegation, it may backfire and discourage them from further

attempts.

vii. The indispensable employee: Sometimes managers want to deliberately seek to make themselves Indispensable. This may be a means of managers dealing with their fear of job security. The effective manager should have developed systems and staff abilities so that people can cope in his absence. A poor manager may be even glad that things did not go well in his absence and may even publish that fact.

B. Subordinates Resistance to delegation

i. The subordinates find it easier to ask the boss what to do rather than taking the initiative themselves

ii. The subordinate fears criticism for mistakes. Since greater responsibilities increase the chance of making mistakes, the subordinates for the sake of security avoid additional responsibilities.

iii. The subordinate may lack the information and resources needed to do the job successfully .So they end up being in confusion. Sometimes subordinates are given responsibility without authority.

iv. The subordinate believes he or she has more work than he or she can do. For fear of over burdening himself he may not show any interest to accept new responsibilities.

v. The subordinate lacks self confidence. Added to that the fear that they will get into trouble in the event of failures puts them in a still worse situation

vi. The subordinate is not offered any incentives or benefits in the terns of pay rises, importance and status for assuming additional responsibilities.

Q3. Construct a diagram depicting the formal organisation of an enterprise or activity with which you are familiar. How does this organisation chart help or hinder the establishment of an environment for performance?

Answer:

Attached is an organisation chart of a company XYZ Ltd. which is a distributor of Audiovisual and Hospitality Systems.

Responsibilities of each are as follows:

Management

A. Chairman:a. Determine the company's vision and mission to guide and

set the pace for its current operations and future development.

b. Determine the values to be promoted throughout the company.

c. Determine and review company goals. d. Determine company policies

B. Director:a. Review and evaluate present and future opportunities,

threats and risks in the external environment and current and future strengths, weaknesses and risks relating to the company.

b. Determine strategic options, select those to be pursued, and decide the means to implement and support them.

c. Determine the business strategies and plans that underpin the corporate strategy.

d. Ensure that the company's organisational structure and capability are appropriate for implementing the chosen strategies

Marketing Department:

Marketing Manager:a. Market & promote company products & services through

direct marketing & meeting potential clients.

b. Establish Marketing Plan with budgets on yearly basis c. Participate in achieving Company sales targetd. Responsible for developing and maintaining marketing

strategies to meet organizational objectivese. Oversees all marketing, advertising and promotional

activities f. Bring the company closer to “people” and raise public

awareness of its products & services.g. Supervise website, brochures, pamphlets company profile.h. Proactively establish and maintain effective working team

relationships with all departments

Marketing coordinator:

a. Back Office support for Marketing Manager.b. Managing submittals and correspondence with customers

Accounts Department:

A. Finance Manager:

a. Manages the organizations financial administrationb. Developing complex finance models and forecasting; c. Responsible for the accounting teamd. Assessing the financial implications of new or existing

ventures; e. Preparing accounts and reconciling balance sheets; f. Overseeing budgetary control; g. Ensure proper and healthy cash flow;

h. Negotiation and relation with banks and other financial institutions to arrange finance requirements and ensure timely settlements;

i. Take measures to reduce overall outstanding with customers by improving collections

j. Managing the cash centrally and supplying the needs of various departments without keeping idle cash at many points.

k. Investment of funds available

B. Chief Accountant:

a. Responsible for day to day finance and accounts operation.b. Preparation of monthly management accounts, including

profit and loss and balance sheets.c. Responsible for timely monthly consolidated financial

statements, payments, cash-flow management reporting.d. Review & approve payment vouchers & journal entriese. Perform cash flow forecasting, budgeting and working

closely with the operations and project teams in analyzing margins, variances and cost analysis.

f. Issue project cost reports for review and approval.g. Develop and maintain internal control and effective

accounting system and policies.

C. Accountant

a. Maintain the Financial Accounts of the company and to present the true P&L Statement

b. Maintain the Accounts Payable & Receivablesc. Arrange finance for various projectsd. Financial software data administration and entrye. Follow up of payment collectionf. Preparing salary sheetsg. Implement company quality system h. Prepare reports (monthly, annual etc.)

Procurement Department

Procurement Manager

a. Place orders with suppliers for all required products/ services.

b. Prepare material status reports.c. Prepare projects requirements & secure the needs for each

project.d. Establishing foreign and domestic suppliers.e. Negotiating the lowest pricesf. Review and check on inventory levels and maintain

minimum needed stockg. Prepare projects drawings/submittals/correspondenceh. Coordination with freight forwarders, courier agents etc in

ensuring economical and speedy shipment.

Procurement Asst. will assist the procurement manager to accomplish all the above

Customer Relations Department

a. Receive customer complaints and co-ordinate with the concerned staff to resolve the problem.

b. Contact clients after every service provided to measure satisfaction.

c. Arrange meetings with unsatisfied clients and coordinate suitable remedies

d. Prepare and carryout customer satisfaction surveys and statistics accordingly.

e. Implement Company Quality Management System.

Operations Department:

A. The Operations Manager:

a. Follow-up & Supervision of administrative operations.b. Follow-up of logistics and warehouse operations.c. Follow-up of HR activities.d. Internal auditing of company accounts.e. Follow-up of the Quality Management System.f. Administer the Company ERP software

B. HR Coordinator

a. Employment(Induction& Orientation, placement, recruitment & selection )

b. Internal Mobility (Transfers, promotions, demotions).c. Compensation (job evaluation, wage and salary

administration, incentives, bonus, fringe benefits).d. Social security measures (compensation to those

employees who involve in accidents, retirement benefits, medical benefits).

e. Provide training and developmental programmes

Asst. HR coordinator will assist the HR coordinator in accomplishing the above tasks.

C. Admin HR coordinator

a. Responsible for Employees affairs b. To maintain the timesheet for the employeesc. Monitor the attendance system and update the databased. Follow up staff problems and propose remediese. Manage deliveries f. Arrange medical/health insurance for staffg. Arrange Duty mission for external trainingh. Implement Company Quality Management System

D. Secretary

a. Responsible for company correspondence.b. All travel arrangements, booking of tickets, hotels and cars

for staff & directorsc. Answering of telephone callsd. Dialing of international calls for staffe. Preparation of meeting agenda, timing and minutes.

E. Warehouse Supervisor:

a. Ensure accurate coding, labelling and recording of materials and equipment and their movements.

b. Proper arrangement of stocks.c. Security arrangements to ensure stock safety against

damage.d. Only accept and store materials inside the warehouse that

have conformed with the correct specifications from the Purchase Order and are in good condition.

e. Supervise all warehouse employees.f. Identify items no longer useful and arrange it to be

segregated in one area and they must be visibly marked o (i.e. “Non-Inventory –“Defective”, “Damaged”, “Obsolete” etc.)

g. Coordinate with Project Engineers about the reserved materials that need to be delivered.

h. Ensure that materials are being received by authorized representative of the customer through evidence of duly signed delivery notes.

i. Verify the warehouse stock ledgers by performing periodic cycle counts throughout the year or as instructed by the Inventory Controller.

F. Inventory controller/Asst. Inventory Controller

a. Supervises, instructs, and trains clerical office and field employees in the use of a computerized inventory system.

b. Maintain a well-kept warehouse inventory stock ledger on ERP system and organize well-kept and duly authorized inventory-related documents. The specific duties in ERP system involve but not limited to the following:

Enter and post purchase receipt of materials. Enter and post delivery of materials for projects. Enter and post stock transfers between internal

locations. Enter and post items requested for demo.

Enter and post inventory adjustments for missing, obsolete, damaged or stolen items.

c. Coordinate & follow up the item discrepancies with the Procurement Manager, Payable Accountant and Senior Project Coordinator until all issues are closed or resolved.

d. Coordinate with the Warehouse Supervisor about the physical inspection for quantities, models, and condition of the ordered materials being received.

e. Send to Accounts Department all copies of duly signed Purchase Receipt along with supplier’s invoice and other shipping documents of received materials for value entry on ERP system.

f. Send to Accounts Department all supported and duly signed delivery notes for verification and billing purposes.

g. Review and reconcile warehouse stock ledgers by performing sampling techniques through periodic “cycle counts” or also known as “test counts”, in assistance of the Warehouse Supervisor, throughout the year rather than by a complete annual stock count of the entire inventory.

Hospitality Department

A. Manager, Hospitality systems

a. Manage all aspects of the projects done by the Hospitality Division.

b. Supervise if necessary some installations to ensure the smooth running of the project.

c. Plan along with clients resources required by each project.d. Train the division staff on selected topics. e. Promote and encourage team work within the division. f. Coordinate all Projects executions, material ordering,

project scheduling, internal/external resource booking, co-ordination with clients and maintain all projects documentation.

g. Receive and direct all support calls and maintain Job Card Records – for small problems, carry out first-line support over the phone.

h. Ensure invoicing and payment collection with Accounts Review all quotes related to Hospitality systems

B. Sales Manager:a. Sell and Marketing of Hospitality products.b. Supervisory responsibility of the Sales Executives.c. Specify company product and services in projects with

clients and consultantsd. Bring in new types of low current business to the companye. Ensure proper and adequate market segment coverage by

employing the right number of Sales Executives.f. Prepare sales figures and statistics

C. Sales Executive

a. Sell and Marketing of Hospitality products.b. Follow up with major account activities between clients on

the quotation given.

D. Head of support

a. Manage all aspects of the service done by the Support team.

b. Supervise if necessary some installations to ensure the smooth running of the project.

c. Set-up maintenance plans, strategies and routine visitsd. Establish service contracts with clientse. Ensures availability of spare parts & place request for

order.f. Manage support calls & issuesg. Supervise support technicians & Support Engineersh. Manage workshop and toolsi. Train client’s representatives on installed systems.

E. Sr. Support Engineer

a. Installation and support of hospitality software and hardware Engineer

b. Attend to clients support calls and resolve system faultsc. Train clients on the usage of product.d. Train other staff members on selected topicse. Implement company Quality Management System

F. Support Eng/ Asst. Support Engineers

a. Set-up maintenance plans, strategies and routine visits.b. Establish service contracts with clients.c. Ensures availability of spare parts & order themd. Manage support calls and issuese. Manage workshop and toolsf. Install & program systemsg. Train client’s representatives on installed systems.

G. Technicians

a. Troubleshooting of electronic equipment (software/hardware).

b. Installation & Maintenance of Hospitality products.c. Keeping stock of all different product spare d. Attending to customer service call within 24 hours.

Audio Visual Department

A. Manager, Audio Visual Systems:

a. Manage a team of sales & technical staff of Audio Visual systems.

b. Sell & promote company products & services through direct marketing, specifying the products in various projects and meeting potential clients.

c. Build a strong team of Sales and Design Engineers.d. Ensure payment collection if a problem exists.e. Propose new activities & products.f. Implement Company quality system.g. Train Company staff on selected topics.

B. Sr. Design Engineer/ Design Engineer:

a. Prepare designs, quotes, and proposals of AV systems.b. Prepare projects BOQ and cost calculationsc. Prepare submittals and systems bindersd. Prepare projects documentation, manuals & drawings

C. Sales Manager:a. Sell and Marketing of Audiovisual products.b. Guide the Sales Team to prepare quotes, designs, proposals,

and submittals depending on the type of project/client., in-line with the company formats & professionally.

c. Specify company product and services in projects with clients and consultants

d. Bring in new types of low current business to the companye. Guide Sales Team to follow up quotes with clients.f. Ensure proper and adequate market segment coverage by

employing the right number of Sales Executives.

D. Sales Executive

a. Sell and Marketing of Audiovisual products.b. Follow up with major account activities between clients on

the quotation given.

E. Sr. Project Coordinator:

a. Follow up and monitor the progress of all company projects from start to completion & ensures optimized projects implementation.

b. Maintain & file complete documentation for every project including drawings & software programs.

c. Confirm projects progress through site visits.d. Prepares project requirements and planning.e. Implement Company Quality System.f. Prepare reports (monthly, annually etc).g. Train Company staff on selected topics.

F. Project Engineer

a. Site supervision and co-ordination before, during, and after installation.

b. Request to order required equipment/systems for projects.c. Program and commission installed systems.d. Supervise Technicians.e. Prepares project requirements and planning.f. Train client’s representatives on installed systems.g. Implement Company quality system.h. Train Company staff on selected topics. i. Prepare projects documentation, manuals & drawings

G. Site Technicians:

a) Installation & Maintenance of Audiovisual, Security & Control Systems.

b) Troubleshooting of electronic equipment (software/hardware).

c) Implement Company quality systems.d) Prepare reports (monthly, annual etc).

This organisation chart enables the employees to understand:

Chain of Command: As organisations activities are divided into departments, coordination becomes necessary for integrating individual and group efforts so as to achieve the goals. Such coordination is achieved through systematic placement of position and duties. This type of arrangement of various positions in an orderly way is called chain of command. It defines the authority of the people. It also suggests the routes through which information flows in the organisation.

Unity of Command: The organisation chart clearly indicated who should report to whom and who should give orders to whom.

Span of control: Span of control refers to the number of subordinates that report directly to a manager.

Organization chart provide both employees and individuals outside the organization with a "snapshot" picture of it's reporting relationships, divisions of work, and levels of management.

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