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Authority, Responsibility,
Accountability, and Delegation
Authority is the formal and legitimate right of a manager to
make decisions, issue orders, and allocate resources to
achieve organizational outcomes
Authority is vested in organizational positions, not people
Authority flows down the vertical hierarchy
Authority is accepted by subordinates
Responsibility
Accountability is the mechanism through which authority
and responsibility are aligned; Sarbanes-Oxley Act
Delegation is the process managers use to transfer authority
and responsibility down the chain 5
10.1 Sample Organization Chart
Line and Staff Authority
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Span of Management
• Advantages:
– Fast response, flexibility in unstable environment
– Fosters concern for customer needs
– Excellent coordination across functional departments
• Disadvantages:
– Duplication of resources across divisions
– Less technical depth and specialization
– Poor coordination across divisions
10.4 Functional Versus Divisional Structures
10.5 Geographic-Based Global Org. Structure
• Geographic or Customer-Based Divisions
- group activities by geography or customer
Departmentalization: Matrix Approach
• Advantages:
– Can draw on expertise worldwide
– Highly flexible and responsive
– Reduced overhead costs
• Disadvantages:
– Lack of control
– Weak boundaries
– Greater demands on managers
– Weaker employee loyalty
Risks of Outsourcing [Lee, 2013]