Organizational Structure- Authority Presented By Christy Cheriyan 06PG0710 Avinash Shiva 06PG0711

Date- 03-10-2006

AUTHORITY


Authority refers to the formal rights inherent in a managerial position to give orders and expect the orders to be obeyed. The power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.

Authority & Responsibility



Fayol suggested that authority and responsibility should be related with the latter arising from the former. He saw authority as a combination of official factors, deriving from managers position and personal factors compounded of intelligence, experience, moral worth, past service, etc.

Nature of Line Staff Relationships



Scalar Principle in organization: The clearer the line of

authority from the ultimate management position in an enterprise to every subordinate position, the clearer will be the responsibility of decision making and more effective will be organizational communication. Line Authority is that relationship in which superior exercises direct supervision over a subordinate an authority relationship in direct line or steps. The nature of staff relationship is advisory. The function of people in a pure staff capacity is to investigate, research and give advice to line managers.

President

VP-Finance

VP-Production

VP-Marketing

Manager Accounting

Manager Cash Flow

Manager Sales

Manager Exports

Manager Purchasing

Manager Manufacturing

Manager Personnel

Manager Quality

Manager Production

Manager Assembly

Manager Maintenance

Functional Authority and Dotted-Line Relationships

PRESIDENT

VP FINANCE

VP PRODUCTION

General Manager Division A

General Manager Division B

General Manager Division C

Finance Manager

Production Manager

Personnel Manager

Marketing Manager

Functional Authority


It is the right that is delegated to an individual or a department to control specified processes, practices, policies, or other matters relating to activities undertaken by persons in other departments. We can understand functional authority by thinking it as a small slice of authority of a line superior.

Decentralization and Centralization



The degree to which formal authority is delegated by managers throughout an organization runs along a continuum from decentralization to centralization. In a relatively decentralized organization, considerable authority and accountability are passed down the organizational hierarchy. In a centralized considerable and accountability remain at the top of the hierarchy.

Centralization and Decentralization as Tendencies

Complete Centralization
( no organization structure)

Complete Decentralization
(no organization structure)

Authority Delegated Authority not Delegated

The Nature of Decentralization



Organizational Authority is merely a discretion conferred on people to use their judgment to make decisions and issue instructions. Decentralization is the tendency to disperse decision making authority in an organized structure. It is a fundamental aspect of Delegation; to the extent the authority is not delegated, it is centralized

Different Kinds of Centralization



Centralization of Performance : pertains to geographic concentration. Departmental Centralization: refers to concentration of specialized activities at one department. Centralization as an Aspect of Management: is the tendency to restrict delegation of decision making.

Delegation of Authority
How Authority is Delegated: the process of delegation involves
   

Determining the results expected from a position. Assigning tasks to position. Delegating authority for accomplishing these tasks Holding the person in that position responsible for accomplishment of the tasks.

Splintered Authority


This exists wherever a problem cannot be solved or a decision made without pooling the authority of two or more managers. In day-to-day operations of any company there are many cases of splintered authority. Many managerial conferences are held because of the necessity of pooling authority to make decisions.

Thank You