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Authority, responsibility and delegation.docx

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University of Calgary
ACCT 301

Authority, responsibility and delegation Objectives: • Describe, recognize and understand the importance of organizational structure • Compare and contrast classical and modern approaches to organizational structure: o Burns and Stalks o Contingency theory o Fayol o Mint berg o Tryst and Bam forth o Urwich o Weber o Woodward • Define the terms authority, responsibility and delegation • Explain the term legitimized power: Weber • Describe the process of determining authority and responsibility • Examine the case of responsibility without authority Describe, recognize and understand the importance of organizational structure Describe and recognize • Organizational structure means grouping people into departments or sections and allocating responsibility and authority • The structure can be presented in organization charts, by position and job descriptions and by rules and procedures • It is also concerned with patterns of authority, communication and workflow • The organizational structure will determine the direction of responsibility and the rela6ti8onship between line, functional and staff organization • A structure may be analyzed by reference to the level at which decisions are made. o Centralized: the upper level of an org hierarchy retain the authority o Decentralized: the authority to take decisions is passed down to units and people at lower levels in the organization’s hierarchy o The choice between the two will depend on the preference of the organization’s top management and the size and scale of the organization’s activities the importance of the organizational structure Entrepreneurial structure • Reflects the position of the owner-manager who makes all key decisions • All power and authority resides in one person • It has the benefits of quick decision making and short lines of communication • The success depends on the abilities of the owner/manager Functional structure • It is the most widely used • Specialization and the division of labor is based on the type of activities taken by the staff • The organization may usually be divided into selling, production and finance departments/functions • The benefits of this structure are: o Employee’s work can be much more effectively controlled and coordinated o Specialized departments can provide clear promotional and staff development. Product-oriented structure • A variety of specialists grouped in a department that focuses on a product or product range. • The main functions of production, sales, people and finance are apportioned to the relative products • such an organization allows considerable delegation by top management and clear profit accountability by division heads. • The benefits are: o The focus of attention is on product performance and profitability o Encourages growth and diversity of products o A number of skills and abilities are combined together on the development of a particular product. • BUT: o Its difficult to maintain centralization of services such as accounting and R&D economically o Success is dependant on the ability of the people in charge of the product Geographical structure • Divides the enterprise into regions or countries • The geographic unit can itself be organized by function or product • The benefits are: o The organization can identify and respond quickly to local opportunities o The profitability for each region can be clearly identified and managed o The interaction with local communities Matrix structures • Is a structure where employees from various departments form a group to achieve a specific target, they usually have dual reporting roles. • It combines a job based group with a project based structure • Provides greater flexibility and coordination of tasks and people • Team members become customer oriented • Motivational, requires employees’ participation and control Compare and contrast classical and modern approaches to organizational structure: Classical writers looked at structure in terms of division of work, chain of command, span of control and reporting relationships: • They focused on the requirements of the formal organization and the search of a common set of principles applicable to all circumstances. • The organization structure was designed for the most efficient allocation and coordination of activities • The position in the structure, not people, had the authority and responsibility of setting tasks done. Fayol – the functional organization • People are placed into formal groups which may be further sub-divided by sections and departments. • Formal groups will vary in the degree of cohesion and size, but all will have a common purpose and a set of rules, which govern relationships. Lynda Urwich – the 8 classical management principles 1. Scalar concept a. Hierarchy of clearly defined posts b. Authority moves from top to bottom 2. Unity of command a. Orders are received from one person~! 3. Exception principle a. Delegation maximized b. Decisions taken at the lowest possible level 4. Span of control concept a. Optimum number of sub-ordinates per hierarchical superior 5. Scientific method a. Observation b. Hypothesizing c. Experimentation d. The formulation of laws should be used in arriving at decisions 6. Specialization 7. Principle of the objective a. Every part of the org to be needed for the purpose of the org 8. Principle of correspondence a. In every position, authority and responsibility should correspond Weber – the bureaucratic model • Great emphasis on formal relationships • Discouraging upward communication to the superior • Orders are given and obeyed! • Clearly defined duties and responsibilities for all org members • Hierarchically arranged staff • Elaborate system of rules • Staff motivated by sense of duty and career prospects • No regards to personal, family or emotional commitments Tryst & Bam forth – Socio-technical systems approach • Emphasized the interrelationships of subsystems and multiple channels of interaction • Indiv
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