Rightful legal power to request subordinates to do certain things or to retain from doing so, and if he does not follow these instructions the manager is in a position ,if need be, to take disciplinary action, even to dismiss the subordinate. Power is the ability of individuals or groups to induce or influence the beliefs or actions of other persons or groups. Five types of power identified John French and Betram Raven Legitimate power of primary concern. It normally arises from position in hierarchy of the organization Expert power come from the expertness of a person or a group. Physicians, lawyers, university professor have considerable influence on others because they are respected from their special knowledge. Referent power personal power that someone based on identification, imitation, loyalty, or charisma. Example: Martin Luther king by the force of his personality, his ideas, and ability to preach, he strongly influenced the behavior of many people. Reward power is the power to give or withhold rewards, such as salary increases, bonuses, promotion ,praise, recognition, and interesting job assignments. Example: University professors have considerable reward power ;they can grant or withhold high grades. Coercive power to force compliance means of psychological , emotional , or physical threat coercion is limited in most organizations. Responsibility: It means obligation,liability,or activity or accountability. According to Koontz: It may be defined as the obligation of a subordinate, to whom a superior has assigned a task, to perform the service required. Line functions are those that have direct impact on the accomplishment of the objectives of the enterprise. Functional authority is the right which 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. Staff functions are those that help the line persons work most effectively in accomplishing the objectives. Example: Production and sales are line functions. Purchasing, accounting ,personnel, plant maintenance and quality control are staff functions. Line executives have direct control over the subordinates under them. Staff executives have no such authority. They are meant to aid and advise the line managers at the same level. The clearer the line of authority from the management position in an enterprise to every subordinate position ,the clearer will be the responsibility for decision making and the more effective will be organization communication. Nature of staff relationship is advisory . Their role is to investigate, research, and give advice to line managers. Line and staff are characterized by relationships and not by departmental activities. Where highly specialized knowledge is required the staffs are much helpful. Specialists are allowed the time to think, to gather data, and to analyze whereas their superiors busy managing operations, cannot do so. Staff help line managers to be effective. Training of young staff executives Danger of undermining line authority. Lack of staff responsibility Thinking in a vacuum Because staff people do not implement what they recommend, it is possible that staff may think in a vacuum. Managerial problems Too much staff activity may complicate a line executives job of leadership and control. Staff managers may sometime interfere in the affairs of the line managers. Staffs are specialists in their area and they are not well versed with the practical problems of the organization. Line managers sometimes do not like to share with staff officers the credit of achievements. Ambiguity about each one’s roles 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. It requires careful selection of which decisions to push down into the structure and which to hold near the top, specific policy making to guide the decision making. Dispersion of customers and dispersion of suppliers. Homogeneity of the product line. Volatility of the competititive environment. The company’s size and attitude toward cost control. Desire for uniformity of policy, management philosophy. 1. Relieves top management of the burden of decision making 2. Encourages decision making and assumption of authority and responsibility 3. Gives manager more freedom and independence in decision making 4. Promotes establishment and use of broad controls which may increase motivation 5. Makes comparison of performance of different organizational units possible 6. Facilitates setting up of profit centers 7. Facilitates product diversifications 8. Promotes development of general managers 9.Aids in adaptation to a fast changing environment LIMITATIONS OF DECENTRALIZATION: 1. limited by the availability of qualified managers 2. Involves considerable expense for training managers 1. Makes it more difficult to have a uniform policy 2. Increases complexity of coordination of decentralized organizational units 3. Result in loss of some control by upper level managers 4. Limited by inadequate control techniques 5. Constrained by inadequate planning and control systems 6. Limited by external forces Includes withholding the authority by few persons at central points. Definition by Louis Allen : centralization is the systematic and consistent reservation of authority at central points in the organization. Types: Centralization of performance Departmental centralization Centralization as an aspect of management 1. Top management can take vital decisions affecting the entire organizations 2. Having a uniform policy and coordination of all activities are possible 3. High-level people in the organization can take more effective and intelligent decisions 4. Centralization offers a more flexible base for the organizational structure 5. Crises and emergency situations can be secured 1. Duplication of effort can be avoided 2. Control and communication becomes easier. 3. LIMITATIONS: Decisions are not taken by the people who face situations and problems in their area. 4. Lower and middle level management will not have interest and initiative in the job. 5. Top management unnecessarily has to waste a lot of time and energy on unimportant and routine matters. 6. It hampers effective communication Authority: According to HENRY FAYOL-It is the right to give orders and exact obedience. Delegation: The process involves the determination of results expected, the assignment of tasks, the delegation of authority for accomplishment of these tasks, and the exaction of responsibility for their accomplishment. 1.Delegation to go by results expected Before assigning duties and delegating the authority to his subordinates, the manager should be clear in his mind as to what be expects from them. 2. Responsibility is Absolute Manager can delegate only authority, not responsibility. The ultimate responsibility for the performance of duties and exercise of delegated authority remains with him. 3.Select appropriate subordinate for delegation 4. Authority to match Responsibility and Vice Versa Delegation can be meaningful only when it enables the subordinates to discharge his duties effectively and efficiently. Just as an ill- equipped soldier can’t fight a battle successfully, an inadequate authorized subordinate cant succeed in accomplishing the assigned task. 5. Ensure unity of Command A subordinate should be commanded by one superior only. 6. Limits to authority to be Well- defined A manager can’t properly delegate authority, unless he fully knows what his own authority is. There should be written manuals and orders to indicate the limits of authority and area of operations of each manager. 7. Help the Subordinate The executive must watch the subordinate not as a policeman, but as a friend or helper. 8. Reward effective delegation Effective delegation and successful assumption of authority must be rewarded. General or specific delegation: Each subordinate is granted general authority to perform the various managerial functions of planning, organizing, direction and control. Written delegation is made by written orders, instructions etc, and unwritten delegation is based on custom, convention or usage. Formal delegation: Example: the sales manager is assigned the responsibility and the accompanying authority to maintain and promote sales. Informal delegation: occurs when employees perform certain duties not because they feel that by doing so they can perform their delegated tasks better and in time. Downward, upward and sideward delegation: Occurs where a superior delegates duties and authority to his immediate subordinates. 1. The determination of results expected from persons in a position. Before assigning duties and delegating the authority the manager should be clear as to what he expects from them. 2.The assignment of tasks to persons in a position. The activities assigned should be stated in operational terms so the subordinate knows exactly what action must be taken to perform the assigned duties. 3.The delegation of authority for accomplishing these tasks. Subordinate must be given the right and power within the organization to accomplish the duties assigned 4.Creating the obligation for the subordinate to perform the duties assigned. The subordinate must be aware of the responsibility to complete the duties assigned and must accept the responsibility. 1. None better than I 2. A sheep in lions clothing 3. I will be exposed 4. The company can’t do without me 5. I am the master 6. Why take the risk 7. None of the subordinates is capable 8. What if he proves better than me Delegation is the process of assigning tasks and granting sufficient authority for their accomplishment. Decentralization is the delegation of authority across numerous units, departments and levels of management. Delegation is the process where as decentralization is the result of planned delegation. Delegation is necessary for the efficient and effective functioning of an organization. Decentralization is optional to the top management.