Organising Test - 72

Decentralization is the process by which the activities of an organization, particularly those regarding planning and decision-making, are distributed or delegated away from a central, authoritative location or group and given to smaller factions within it. Concepts of decentralization have been applied to group dynamics and management science in private businesses and organizations, political science, law and public administration, technology, economics and money.

The company can continue with the same organisational functional structure as it has added a new product to the existing product line. It is just required to set up another manufacturing unit for electronic toys.

Span of management means how many subordinates can be effectively managed by a manager. It depends upon capacity and intelligence level of manager and subordinates, trust in subordinates and nature of job.

The degree to which decision-making is confirmed at a single point in an organization is described as Centralization. It refers to a structure in which the decision-making powers are concentrated in a few top leaders of the organizational structure. The top management finalize the decisions and communicated to lower-level managers for implementation.

Under Informal organisational structure, there is no fixed path of passing information among employees. The Information can pass from any side to any side. The principle of scalar chain is violated here.

Authority is the right to take decision because of managerial position. It determines superior subordinate relationship. It arises through scalar chain in formal organisations due to various job positions. Thus authority is a right to command ones subordinates.

Responsibility is exacted Upward while authority flows downward.

The essence of responsibility is the obligation of a subordinate to perform the duty assigned. Usually, authority flows downwards whereas accountability flow upwards. Accountability always flows upwards; it is the act of being liable for actions and decisions.

When the size of organisation is large and it deals in more than one type of product. Thus the structure is formed on the basis of product is called divisional structure.

Accountability is the final step of delegation process and arises from responsibility. It means subordinates will be answerable for the non completion of task or final output. It can not be delegated.

Authority is the power/right to take decision. It arises from formal job positions in the organisation and flows from superior to subordinate.