Centralization and Decentralization and Span of Control
- 2. CENTRALIZATION MEANING: Concentration of authority at top level for decision making with one or few managers is known as centralization of authority. Thus, under centralization the top level management only takes the decision and the lower level has to follow it. DEFINITION: According to LOUIS A. ALLEN, “centralization is the systematic and consistent reservation of authority at central point in an organization”.
- 3. ADVANTAGES OF CENTRALIZATION Uniform policy can be evolved. Decrease complexity of co-ordination that is observed in decentralization structure. Top authority gain control over the affairs of the organization and adequate control techniques can be adapted. Organization is relieved of the burden of looking for more qualified middle manager and reduce training cost on these personnel. Fast execution and reduce conflict.
- 4. DISADVANTAGES OF CENTRALIZATION Top management is over burdened with many functions and problems associated with them. Since authority and responsibility are concentrated, decision-making being absolute and independent, may prove growth of the enterprise. Limited Communication and less creativity. Lack of flexibility. Supporting staff are overburdened with tasks. Adaptability to fast charging environment become difficult.
- 5. DECENTRALIZATION MEANING: Decentralization of authority means dispersal of authority to take decisions to the lower levels of organization. It transfer authority being centralized in few hands is spread over to a number of employees. DEFINITION: According to LOUIS A. ALLEN, “Decentralization refers to systematic effort to delegate to the lowest level, all authority except that which can be exercised at central points”.
- 6. ADVANTAGES OF DECENTRALIZATION Develops initiative among subordinates. Develops managerial talent for the future. Quick decision making. Relief to top management. Facilitates growth. Better control. Creativity and innovative ideas.
- 7. DISADVANTAGES OF DECENTRALIATION Depend upon the quality of personal. Uneconomic and unwieldy (difficult to move). It does not good for small business. In effective. Harmful. Wastage of resources.
- 8. SPAN OF CONTROL Span of control, also called span of management, it is the number of subordinates who report directly to a manager or leader. The more employees assigned to a manager, the wider their span of control. It is the term used in business management, particularly human resource management. The term refers to the number of subordinates or direct reports a supervisor is responsible for. For example, a manager can manage 4-6 subordinates when the nature of work is complex, whereas, the number can go up to 15-20 subordinates for repetitive or fixed work.
- 9. TYPES OF SPAN OF CONTROL • Wide-Span of Control. • Narrow-Span of Control A wide span of control is in which a large number of subordinates are supervised by one supervisor. And the narrow span of control is in which a small number of a subordinate is supervised by their head. They both are effective.
- 10. IMPORTANCE OF SPAN OF CONTROL • Limitation of time: Head of business organization has not enough time in a day to supervise all divisional employees. For this, every business enterprise needs a span of control to have the head of the subordinate in every division. • Limitation of Capacity: Human energy is also the reason why managers can’t deal with a large number of employees all himself. To handle employees, one needs to be very energetic, passionate, and cooperative, But all of this has some limit in humans. • The span of attention: In humans, naturally, we pay attention and concentration to specific people and work to a certain level. It’s not possible to deal with full concentration and time for all divisions.
- 11. • Communication: It is very effective that you have good communication skills and make others understand your point. • Psychological Factors: Different employees have different personalities, attributes, and abilities. The Head of the division should understand every employee’s personality so that they can take work from them properly. This to have a span of control in an organization because if one person deals with every division. They can’t focus on a single employee. • Growth Chances: Span of control helps in managing things properly as every division has its own roles and specific reporting to specific person. This way, plans can be made and more improvement will be there.