Page 207 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 11: Structural Implementation

organisation should know to whom they report as well as the successive management Notes
levels all the way to the top.
3. Specialization: Specialization, sometimes called division of labour, is the degree to which
organisational tasks are subdivided into separate jobs. Work can be performed more
efficiently if employees are allowed to specialize. This is because an employee in each
department performs only the tasks relevant to his specialized function. Despite the apparent
advantages of specialization, many organisations are moving away from this principle.
With too much specialization, employees are isolated performing only a single, boring
job. Many companies are, therefore, enlarging jobs to provide greater challenges or
assigning tasks to teams so that employees can rotate among several jobs performed by
the team.
4. Authority, Responsibility and Delegation: Authority is the formal and legitimate right of
a manager to make decisions, issue orders, allocate resources and command obedience.
Responsibility is the duty to perform the task or activity an employee has been assigned.
Accountability means that the people with authority and responsibility are subject to
reporting and justifying task outcomes to those above them in the chain of command.

Notes Delegation is the process managers use to transfer authority and responsibility to
positions below them in the hierarchy. The principle is that there must be parity between
authority and responsibility. It means managers can be made accountable for results only
when they are delegated with sufficient authority commensurate with the responsibility.

Most organisations today encourage managers to delegate authority to the lowest possible
level to provide maximum flexibility to meet customer needs and adapt to the
environment. Managers are encouraged to delegate authority, although they often find it
difficult.
5. Centralization and Decentralization: Centralization and decentralization refer to the
level at which decisions are made. Centralization means that decision-making is done at
the top levels of the organisation. Decentralization means that decision making is pushed
down to the lower levels in the organisation. Centralization helps in better coordination,
but too much centralization results in slow response and demotivates people at lower
levels. Decentralization relieves the burden on top managers, makes greater use of worker’s
skills, ensures decision making by well-informed people and permits rapid response to
external changes. But it does not mean that every organisation should decentralize.
Managers should diagnose the organisational situation and select the decision-making
level.
6. Formalization: Formalization is the extent to which written documentation is used to
direct and control employees. Written documentation includes rules, regulations, policies,
procedures, job descriptions etc. They are inexpensive ways to coordinate activities. These
documents complement the organisational structure by providing descriptions of tasks,
responsibilities and authority. The use of rules and regulations is a part of bureaucratic
model of organisation.

!
Caution Although written documentation is intended to be rational and helpful to the
organisation, it often creates “red tape” that causes more problems than it solves.
Narrowly defined job descriptions, for example, tend to limit the creativity, flexibility
and rapid responses needed in today’s knowledge-based organisations. Many organisations
today are reducing formalization and bureaucracy.

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