By decentralization of authority we mean dispersal of decision-making authority at various levels in the organization. In a centralized set-up, decision-making authority is concentrated at the top-level of the management, whereas in the decentralized set-up, many important decisions are made at the lower level also. The most significant feature of decentralization of authority is that most of the decisions made at the lower level do not need approval of the seniors. This means greater freedom is given in decision-making to lower level managers and supervisors in the organization. Factors Determining the Degree of Decentralization Importance and significance of the decision: One of the important factors determining the degree of decentralization of authority is costliness of the decision. Normally, decisions which are costly in terms of money value involved or in terms of factors like goodwill and image of the establishment, employee morale or motivation tend to be centralized at the upper levels of management. In other words, it is very rare that authority for crucial decisions is delegated. Of course, the practice is not based on the assumption that people at the higher ...

Span of management directly affects the number of levels in the organization. Span of management is of two types; Wider span of management and Narrow span of management.  Wider span of management leads to flat organization whereas narrow span of management result in tall organization structure. The principle of span of management does not by itself resolve the conflict between the advantages to tall organization and that of a flat one. Narrow spans lead to many levels in the organization and thus required a larger number of managers. This, in turn, leads to larger expenses in the form of executive remuneration. Expenses are further increased on account of additional clerical and office staff needed as a result of there being large number of managers. The process of control also gets complicated when there are narrow spans and too many levels in the organization structure. Another serious problem in having too many levels in the organization is posed by the practice that communication must flow through proper channels only. The more the levels in the organization through which the communication must passes, the greater will be the danger of its being misunderstood, misinterpreted ...

An organization is characterized by the presence of a number of levels and departments. But more the levels are created, more will be the administrative cost due to additional staff required and more will be the difficulties to be encountered in communication and controlling. If this is so, why create departments and levels? Answer to this question is provided by the principle of span of management. This is basically the problem of deciding the number of subordinates to report directly to each manager. The principle states that there is a limit to the number of subordinates that each manager can effectively supervise. The term “span of management” is often referred to as span of control, span of supervisions, span of responsibility or span of authority. But the term “span of management” should preferably be used since span is one of management and not merely or control which is just important function of management. The problem of span of management is not a new one. Ever since the dawn of organized co-operation, man has experienced and realized that no individual can deductively supervise and infinite number of subordinates. Because of biological and other limitations, ...

Traditional organisation theorists developed certain principles of organization structure. These principles are intended for universal application to all enterprises. The most important of these organization structure principles can be listed under the following heads: 1. Division of labour or Specialization The classicists viewed specialization as the basis of efficiency. A group of individuals can secure better results by having division of work. F.W. taylor applied by breaking down jobs into single repetitive tasks performed on specialized tools. At higher levels, however, grouping jobs into manageable units and their co-ordination can pose serious problems. The principle of specializations has been challenged by the behavioralists and others. Fatigue, monotony and boredom are the inevitable outcomes of division of labor. While specializations cause great function interdependency among operatives, it also depersonalizes their activities so that individuals find little meaning in the work. Moreover, functional interdependency among work activities causes strains and tensions. Specialization leaves to a different type of problems at the executive level. It tends to segment the ...

Motivation can be defined as stimulating, inspiring and inducing the employees to perform to their best capacity. Motivation is a psychological term which means it cannot be forced on employees. It comes automatically from inside the employees as it is the willingness to do the work. Process of Motivation Unsatisfied need. Motivation process begins when there is an unsatisfied need in a human being. Tension. The presence of unsatisfied need gives him tension. Drive. This tension creates an urge of drive in the human being an he starts looking for various alternatives to satisfy the drive. Search Behavior. After searching for alternatives the human being starts behaving according to chosen option. Satisfied need. After behaving in a particular manner for a long time then he evaluates that whether the need is satisfied or not. Reduction of tension. After fulfilling the need the human being gets satisfied and his tension gets reduced. For example, if an employee develops a need to earn more, this need will make him restless and he will start thinking how to satisfy his need. To satisfy his need he may think of working hard in organization and get promotion so he ...

Incentives can be defined as monetary or non-monetary reward offered to the employees for contributing more efficiency. Incentive can be extra payment or something more than the regular salary or wage. Incentive acts as a very good stimulator or motivator because it encourages the employees to improve their efficiency level and reach the target. The two common types of incentives are: 1. Monetary or financial incentives The reward or incentive which can be calculated in terms of money is known as monetary incentive. These incentives are offered to employees who have more physiological, social and security need active in them. The common monetary incentives are: Pay and allowances. Regular increments in salary every year and grant of allowance act as good motivators. In some organizations pay hikes and allowances are directly linked with the performance of the employee. To get increment and allowance employees perform to their best ability. Profits sharing. The organization offer share in the profits to the employees as a common incentive for encouraging the employees for working efficiently. Under profits sharing schemes generally the companies fix a percentage of ...