Page 122 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Unit 5: Coordination, Centralisation and Decentralisation

5.5 Summary Notes

To achieve results, managers have to combine physical, financial and human resources in
an effective and efficient way.

The process by which a manager brings unity of action in an organisation is coordination.
It is a conscious and deliberate blending of activities to achieve unity of action.
Coordination pulls all the functions and activities together, improves human relations
and increases inter-departmental harmony.
Coordination is easy to achieve through direct interpersonal relationships and
communications.

All departments and units must realise the inter-relatedness of their work and thus initiate
coordination in the early stages of planning.
Coordination works through certain distinguished principles.

The process of coordination involves a series of steps: clear goals, proper allocation of
work, sound organisation structure, clear reporting relationships, proper communication
and sound leadership.
System thinking focuses on how a component of a system under study interacts with other
constituents of the same system.
Centralisation and decentralisation, being the two extremes of operations of authority,
are relative terms.

We, today, cannot think of an organisation which is completely centralised or decentralised
as in between the operations of the two there is always a continuum of authority.
Their applications in a democratic setup would depend upon the objectives of the
organisation, its life and size, nature of service, etc.
In centralisation, power and discretion remain concentrated at the top levels.
Centralisation works well in the early stages of organisational growth and keeps all parts
of the organisation moving harmoniously towards a common goal.
It also helps in handling resources and information very well, in times of emergency.
However, when the organisation grows beyond a limit, centralisation comes in the way
of proper coordination, communication and control.
In decentralisation, a great deal of authority is delegated and more decisions are made at
lower levels.
Decentralisation allows subordinates to grow and reduces the burden of the top executives
and allows them to focus attention on key issues.
5.6 Keywords

Centralisation: The process by which the activities of an organisation, particularly those
regarding decision-making, become concentrated within a particular location and/or group.

Conflicts: Actual or perceived opposition of needs, values and interests.
Coordination: The act of coordinating, making different people or things work together for a
goal or effect.

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