1.1 PRINCIPLES OF MANAGEMENT

Ques 1: Discuss between delegation and decentralization. Cite some of the important obstacles to effective delegation.

Ans1. Delegation: A concept related to authority is delegation. Delegation is the downwards transfer of power from an administrator to a subordinate. It is the entrusting part of work or control to others. It is a permission to a subordinate administrator to create choice, to requisition sources, and to execute other projects in a specified way. Delegation is how an administrator efficiently designates a work to be achieved. Delegation is a three-step procedure such as providing liability, providing power and developing liability. These actions can differ between companies, but the procedure must be done efficiently and concretely. Delegation can be finished based on assumed working agreements that are already recognized by before delegation connections. Delegation methods are modified according to the characteristics of the execute itself and by a person who will be finishing the work. Delegation is an important expertise for supervisors to use to create the best of their own time and sources. It is the recommended strategy to handling and training people who have great expertise and great will to finish the particular process at hand.

Importance of delegation

Delegation is the characteristics of management and the substance of a sound company. Only one personal cannot handle and manage everything due to physical and mental limitations. The projects include in management of an company are too large and one particular person cannot release them single-handedly. Therefore, he must split his work and discuss his obligations with others. Once a man’s job develops beyond his personal potential his achievements lie in his capability to increase himself through other people..

Delegation of authority provides the following advantages:

It enables the managers to distribute their work load to others. By reducing the workload for routine matters, they can concentrate on more important policy matters.

• Delegation conveniences fast conclusions since the power to make decisions is placed near the point of action. Employees need not approach the boss each and every time need for a decision arises.

• Delegation helps to improve the job satisfaction, motivation and morale of subordinates. It helps to satisfy their needs for recognition, responsibility and freedom.

• By clearly interpreting the authority and responsibility of employees, a manager can keep balanced interactions with them. Delegation increases interaction and understanding among managers and subordinates.

• Delegation allows a manager to obtain the specialized information and skills of subordinates.

• Delegation allows to guarantee continuity in business because managers at lower levels are enabled to receive beneficial experience in decision making. They get an opportunity to develop their abilities and can fill higher positions in case of need.

Obstacles of delegations

Delegation is a two-sided relationship. It is a demanding function. It demands sacrifices from both the delegator and delegate. The superior must be willing to slice out a portion of his authority and the subordinate must be willing to shoulder additional responsibilities. Successful delegation is a product of psychological willingness of both the parties to accept responsibilities and fulfil the obligation in a sincere way. The concept of delegation thus is very easy to understand but difficult to operationalize or translate into concrete action. Obstacles than can make delegation within an organization difficult or even impossible can be classified into 3 general categories:

1. Obstacles related to the Supervisor

2. Obstacles related to Subordinates

3. Obstacles related to Organizations

Superior-related problems:

Some managers are reluctant to delegate because of their belief that they can always take better decisions and show good results than their subordinates. Managers suffering from an inflated sense of their own often end up doing the subordinate’s work to the criminal neglect of their own activities.

Managers are reluctant to delegate because delegation means delusion of authority and power. The importance of the superior is reduced to the extent of the authority is transferred to the subordinate. The subordinate may ultimately improve his skills through consistent delegation and may turn out to be potential competitor for the superior’s job.

Sometimes managers may like to delegate but may not be able to do it effectively because of their inability to identify and communicate the essential features of his plans, policies etc.

Delegation is not assuring bet. There is no guarantee that delegation would turn out to be fruitful. So there is no substance in the argument that delegation must be practiced strictly to improve results. If things go wrong, the superior is answerable and has to face the music from many quarters.

Subordinate-related factors:

If subordinate finds it easier to depend upon the superior for taking decisions or solving problems he may avoid accepting authority even through the superior may be prepared to delegate it.

Committing mistakes is an essential part of learning. If the subordinate is deprived of that and he fears that he will be in for uncharitable criticism even for a small genuine mistake, he will shrink from accepting a job.

A subordinate who believes that he does not possess the requisite information and necessary resources required for turning out a creditable performance may be generally unwilling to accept difficult assignments.

Subordinate who lack self-confidence depend on the superior for continuous coaching and guidance. They feel secure and comfortable in the relationships of dependence with their superior’s.

A subordinate may hesitate accepting more work delegated to him by the superior if he does not get adequate incentives in the form of recognition and credit and other monetary rewards. Accepting additional duties usually involves mental effort and emotional pressures.

Organization-related factors:

Sometimes superiors want to delegate authority and subordinate like to accept delegation. But delegation may be hampered due to weakness in the organization structure. Some these weakness are as follows:

Inadequate planning,

Splintered authority,

Lack of unity of command,

Absence of effective control techniques,

Non-availability of competent managers, and

Environment of internal distrust.

In any organisation, the degree of delegation depends upon several factors, e.g. size of the organization, decentralized performance, management philosophy, workload of managers, etc.

Decentralization

Decentralization is the process of dispersing decision-making governance closer to the people or citizen. It includes the dispersal of administration or governance in sectors or areas like engineering, management science, political science, political economy, sociology and economics. Decentralization is also possible in the dispersal of population and employment. Law, science and technological advancements lead to highly decentralized human endeavours. Decentralization is most effective in organizations where subunits are autonomous and cost and profits can be independently measured.

Decentralization is the systematic effort to delegate to the lowest levels all authority except that which can be exercised at central points. In other words, decentralization is the pushing down of authority and power of decision making to lower levels of organization or the disposal of the centres of decision making thought the organization. The transfer of responsibilities and resources involves different relationships between the central administration and the organizations to which the transfer is made. The nature of these relationships, and the objectives of the transfer, determines the form of decentralization.

Importance of decentralization

Decentralization has been looked at as a singularly useful mode of administration to deliver the public services from convenient local centres close to the client’s locality. Bringing administration to the doorstep of the citizen and establishing a direct relationship between the client and the administration have been the driving force behind decentralization in most of the developing countries. The urge for decentralization has come from many sources.

1. It has been prompted by the need to deliver the basic public goods like food, housing, water from local units of administration as soon as possible.

2. Most people in the developing countries live in rural areas which are away from the National Capital located in distant urban area. Administration has to penetrate the rural areas and link these up with the nation as a whole.

3. In many countries sociological diversities manifest themselves in ethnic, linguistic and religious differences. Administration needs to be decentralized in response to regional diversities.

4. Regional and local resources can be utilized for area development purposes, only if administration would move out to the regions and localities. Decentralization, therefore, facilitates, local planning and development with the help of local resources.

5. Decentralization has its own value in political and administrative terms. Politically, local participation on development activities, with intensive responses paves the way for meaningful articulation of local demands.

The more decentralized a method is the more it is based on horizontal connections, and the fewer it can rely on order or push. Decentralization is the scheme of delegating decision-making power down to the lower stages in an company, comparatively apart from and lower in a central authority. A decentralized organization shows fewer tiers in the organizational structure, wiser span of control and a bottom-to-top flow of decision-making and flow of ideas. The wider spans of control also reduce the number of tiers within the organization giving its structure a flat appearance.

For example, an experienced technician at the lowest tier of an organization might know how to increase the efficiency of the production, the bottom-to-top flow of information can allow for this knowledge to pass up to the executive officers.

Advantages of Decentralization are:

Decentralization allows to minimize the amount of work of top executives. They can dedicate increased time and focus to crucial policy matters by decentralizing authority for routine functional decisions.

It helps to improve the job satisfaction and morale of lower level managers by satisfying their needs for independence, participation and status.

Under decentralization, authority to make decision is placed in the hands of those who are responsible for executing the decisions, As a result, more accurate and faster decisions can be taken as the subordinates are well aware of the realities of the situation.

Decentralization facilities the growth and diversification of the enterprise. Each product divisions is given sufficient autonomy for innovations and creativity.

When authority is decentralized, subordinates get the opportunity of exercising their own view. They master how to choose and develop managerial skills.

Managers at lower levels have adequate to make changes in work assignments, to change production schedules, to recommend

promotions and to take disciplinary actions. Therefore, more effective supervisions can be exercised..

Types of decentralization

Four different types of decentralization can be identified are as follows;

1. Administrative: Administrative decentralization refers to decentralization of authority to the lower officials in the administrative hierarchy of organizations.

2. Functional: Functional decentralization implies that the functions are decentralized to the specialized units or departments like education or health.

3. Political: Political decentralization aims to give citizens or their elected representatives more power in public decision-making.

4. Geographical: In geographical decentralization, the powers and functions of headquarters decentralized to the field departments of the state government which are further decentralized to their field officers at the regional and district levels. This facilitates quick decision-making keeping in view the local requirements.

Distinguish between Delegation and Decentralisation

Delegation is not a swap of power but it is simply an assignment of authority to a lower body by a higher level of administration. Delegation is simply a method of administration or management while decentralization deals with deep need of democracy. Like delegation, decentralization is also a technique of administration. Decentralization signifies assignment of certain functions to the agent of the central or state government in the field.

Example: The District collector being vested with authority over development departments in the district in an example of decentralization. The Commissioner of Police delegating powers to permit holding of public meeting to the Assistant Commissioner of the concerned area is an example of delegation.

The following are some of the differences between the two terms though there are employed interchangeably at times.

1. Delegation simply indicates authority down to subordinates. Decentralization involves: a) analysing what authority to push down to subordinates. b) Developing guidelines and regulations to guide subordinates who have the authority delegated them. c) Implementing selective but sufficient controls for tracking efficiency.

2. Delegation is involved giving of either managerial work or operating work between a manager and a subordinate. Decentralization, is a sharp contrast is concerned exclusively with sharing of managerial work i.e. the power of decision making between two managers.

3. Decentralization is a managerial doctrine; it embraces all areas of management. Viewed in this angle, decentralization indicates methodical and company-wide delegation on the part of all managers who must agree to and exercise delegation as a typical idea or a way of organization life.

4. Delegation can occur on an individual basis under which some managers make wide delegation and others effect very little delegation. Delegation can take place on a limited scale even in a centralized company. In other words, it can be used by a specific management in a specific area of the business devoid of being a party to the decentralization program for the company as a whole. Decentralization represents a shrewd balance between delegation of authority and centralized control. Finding the right balance between autonomy and control is the crucial issue in the art of decentralizing.

5. Delegation is the process and decentralization is the result. Delegation is the key to organization. Organizing without delegation has no meaning. Delegation is thus essential for group efforts. Decentralization is optional.

Effecting Delegation

Delegation a job successfully is the most significant aspect in delegation. The abilities and traits of each and every individual in the team for delegation job to be evaluated and analysed. Participants in the delegation process, as they can offer certain new thoughts or idea to assist in this process. Provide sufficient assistance to the team in order to let them achieve their task with success.

Concentrate on outcomes, analyse and evaluate their abilities on a everyday base so as to comprehend that the work delegated is achieved effectively or not and which individual is best fitted for which work. There are many factors included in management expertise but delegation is also an important quality to develop employer wants successful management of the tasks to the subordinates.

1. Assigns tasks to the most appropriate employee.

2. Assigns work by describing the end product result and allows the employee to control the resources and make the decisions to reach it.

3. Delegates work to the lowest appropriate level.

4. Recognizes opportunities to delegate.

5. Offers guidance and instruction based on each employee’s needs.

6. Uses delegation to offer development experiences to others.

7. Assigns employees new responsibilities if appropriate.

8. Monitors after delegation to help employee reach goal.

9. Balances responsibilities and tasks not delegated with those that have been delegated.

Delegation is the entrustment by a party of work or responsibility and authority to another and the creation of accountability for performance. A delegation can also be a group of individuals often called delegates, who represent the interests of a larger organization or body, often from a geographical area. Delegation is the assignment of authority and responsibility to another person to carry out specific activities. The person who delegates the work remains accountable for the outcome of the delegate work. It allows a subordinate to make decisions i.e. it is a shift of decision-making authority from one organization level to a lower one. Delegation, if properly done is not abdication. The opposite of effective delegation is micromanagement where a manager provides too much input directions and review of delegated work.

Ques 3: Construct a diagram depicting the formal organization of an enterprise or activity with which you are familiar. How does this organization chart help or hinder the establishment of an environment for performance?

Ans 3. Attached is an organisation chart of a company XYZ Ltd. which is a distributor of Audiovisual and Hospitality Systems.

Organization chart of XYZ Ltd.

Responsibilities of each are as follows;

Management

A. Chairman:

a. Determine the company's vision and mission to guide and set pace for its current operations and future development.

b. Determine the values to be promoted throughout the company.

c. Determine and review company goals.

d. Determine company policies.

B. Director:

a. Review and evaluate present and future opportunities, threats and risks in the external environment and current and future strengths, weakness and risks relating to the company.

b. Determine strategies option, select those to be pursed, and decide the means to implement and support them.

c. Determine the business strategies and plans that underpin the corporate strategy.

d. Ensure that the company's organisational structure and capabilities are appropriate for implementing the chosen strategies.

Marketing Department

A. Marketing Manager:

a. Market & promote company product & services through direct marketing & meeting potential clients.

b. Establish Marketing Plan with budgets on yearly basis.

c. Participate in achieving Company sales target.

d. Responsible for developing and maintaining marketing strategies to meet organizational objectives.

e. Oversees all marketing, advertising and promotional activities.

f. Bring the company closer to "people" and raise public awareness of its product & services.

g. Supervise website, brochures, pamphlets company profile.

h. Proactively establish and maintain effective working team relationships with all departments.

B. Marketing Coordinator:

a. Back Office support for Marketing Manager.

b. Managing submittals and correspondence with customers.

Account Department

A. Finance Manager:

a. Manages the organizations financial administration.

b. Developing complex finance models and forecasting.

c. Responsible for the accounting team.

d. Assessing the financial implications of new or existing ventures.

e. Preparing accounts and reconciling balance sheets.

f. Overseeing budgetary control.

g. Ensure proper and healthy cash flow.

h. Negotiation and relation with banks and other financial institutions to arrange finance requirements and ensure timely settlements.

i. Take measures to reduce overall outstanding with customers by improving collections.

j. Managing the cash centrally and supplying the needs of various departments without keeping idle cash at many points.

k. Investment of funds available

B. Chief Accontant:

a. Responsible for day to day finance and accounts operation.

b. Preparing of monthly management accounts, including profit and loss and balance sheets.

c. Responsible for timely monthly consolidated financial statement, payments, cash-flow management reporting.

d. Review & approve payment couchers & journal entries.

e. Perform cash flow forecasting, budgeting and working closely with the operations and project teams in analyzing margins, variances and cost analysis.

f. Issue project cost reports for review and approval.

g. Develop and maintain internal control and effective accounting system and policies.

C. Accountant

a. Maintain the financial Accounts of the company and to present the true P & L Statement.

b. Maintain the Accounts Payable & Receivables.

c. Arrange finance for various projects.

d. Financial software data administration and entry.

e. Follow up of payment collection.

f. Preparing salary sheets.

g. Implement company quality system.

h. Prepare reports (monthly, annual etc.)

Procurement Department

Procurement Manager:

a. Place orders with suppliers for all required product/services.

b. Prepare material status reports.

c. Prepare projects requirements & secure the needs for each project.

d. Establishing foreign and domestic suppliers.

e. Negotiating the lowest prices.

f. Review and check on inventory levels and maintain minimum needed stock.

g. Prepare projects drawings/submittals/correspondence.

h. Coordination with freight formarders, courier agents etc in ensuring economical and speedy shipment.

Procurement Asst. will assist the procurement manager to accomplish all the above

Customer Relations Department

a. Receive customer complaints and co-ordinate with the concerned staff to resolve the problem.

b. Contact clients after every service provided to measure satisfaction.

c. Arrange meetings with unsatisfied clients and coordinate suitable remedies.

d. Prepare and carryout customer satisfaction surveys and statistics accordingly.

e. Implement Company Quality Management System.

Operations Department

A. The Operations Manager:

a. Follow-up & Supervision of administrative operations.

b. Follow-up pf logistics and warehouse operations.

c. Follow-up of HR activities.

d. Internal auditing of company accounts.

e. Follow-up of the Quality Management System.

f. Administer the Company ERP software.

B. HR Coordinator:

a. Employment ( Induction & Orientation, placement, recruitment & selection)

b. Internal Mobility (Transfers, promotions, demotions).

c. Compensation (Job evaluation, wage and salary administration, incentives, bonus, fringe benefits).

d. Social security measures (compensation to those employees who involve in accidents, retirement benefits, medical benefits).

e. Provide training and development programmes.

Asst. HR coordinator will assist the HR coordinator in accomplishing the above tasks.

C. Admin HR coordinator

a. Responsible for Employees affairs.

b. To maintain the timesheet for the employees

c. Monitor the attendance system and update the database.

d. Follow up staff problems and propose remedies.

e. Manage deliveries.

f. Arrange medical/health insurance for staff.

g. Arrange Duty mission for external training.

h. Implement Company Quality Management System.

D. Secretary

a. Responsible for company correspondence.

b. All travel arrangements, booking of tickets, hotels and cars for staff & directors.

c. Answering of telephone calls.

E. Warehouse Supervisor:

a. Ensure accurate coding, labelling and recording of materials and equipment and their movements.

b. Proper arrangement of stocks.

c. Security arrangement to ensure stock safety against damage.

d. Only accept and store materials inside the warehouse that have conformed with the correct specifications from the Purchase Order and are in good condition.

e. Supervise all warehouse employees.

f. Identify items no longer useful and arrange it to be segregated in one area.

g. Coordinate with Project Engineers about the reserved materials that need to be delivered.

h. Ensure that materials are being received by authorized representative of the customer through evidence of duly signed delivery notes.

i. Verify the warehouse stock ledgers by performing periodic cycle counts throughout the year or as instructed by the Inventory Controller.

F. Inventory controller/Asst. Inventory Controller

a. Supervises, instructs and trains clerical office and field employees in the use of a computerized inventory system.

b. Maintain a well-kept warehouse inventory stock ledger on ERP system and organize well-kept and duly authorized inventory-related documents. The specific duties in ERP system involve but not limited to the following:

Enter and post purchase receipt of materials.

Enter and post delivery of materials for projects.

Enter and post stock transfers between internal locations,

Enter and post items requested for demo.

Enter and post inventory adjustments for missing, obsolete, damaged or stolen items.

c. Coordinate & follow up the item discrepancies with the Procurement Manager, Payable Accountant and Senior Project Coordinate until all issues are closed or resolved.

d. Coordinate with the Warehouse Supervisor about the physical inspection for quantities, models and condition of the ordered materials being received.

e. Send to Accounts Department all copies of duly signed Purchase Receipt along with supplier's invoice and other shipping documents of received materials for value entry on ERP system.

f. Send to Accounts Department all supported and duly signed delivery notes for verification and billing purposes.

g. Review and reconcile warehouse stock ledgers by performing sampling techniques through periodic "cycle counts" or also known as "test counts" in assistance of the Warehouse Supervisor, throughout the year rather than by a complete annual stock count of the entire inventory.

Hospitality Department

A. Manager, Hospitality systems

a. Manage all aspects of the projects done by the Hospitality Division.

b. Supervise if necessary some installations to ensure the smooth running of the project.

c. Plan along with clients resources required by each project.

d. Train the division staff on selected topics.

e. Promote and encourage team work within the division.

f. Coordinate all Projects executions, material ordering, project scheduling, internal/external resource booking, coordination with clients and maintain all projects documentation.

g. Receive and direct all support calls and maintain Job Card Records- for small problems, carry out first- line support over the phone.

h. Ensure invoicing and payment collection with Accounts Review all quotes related to Hospitality Systems.

B. Sales Manager:

a. Sell and Marketing of Hospitality products.

b. Supervisory responsibility of the Sales Executives.

c. Specify company product and services in projects with clients and consultants.

d. Bring in new types of low current business to the company.

e. Ensure proper and adequate market segment coverage by employing the right number of Sales Executives.

f. Prepare sales figures and statistics.

C. Sales Executive

a. Sell and Marketing of Hospitality products.

b. Follow up with major account activities between clients on the quotation given.

D. Head of support

a. Manage all aspects of the service done by the Support team.

b. Supervise if necessary some installations to ensure the smooth running of the project.

c. Set-up maintenance plans, strategies and routine visits.

d. Establish service contracts with clients.

e. Ensures availability of spare parts & place request for order.

f. Manage support calls & issues.

g. Supervise support technicians & Support Engineers.

h. Manage workshop and tools.

i. Train client's representatives on installed systems.

E. Sr. Support Engineer

a. Installation and support of hospitality software and hardware Engineer.

b. Attend to clients support calls and resolve system faults.

c. Train clients on the usage of product.

d. Train other staff members on selected topics.

e. Implement company Quality Management System.

F. Support Eng/Asst. Support Engineers

a. Set-up maintenance plans, strategies and routine visits.

b. Establish service contracts with clients.

c. Ensures availability of spare parts & order them.

d. Manage support calls and issues.

e. Manage workshop and tools.

f. Install & program systems.

g. Train client's representatives on installed systems.

G. Technicians

a. Trouble shooting of electronic equipment (software/hardware).

b. Installation & Maintenance of Hospitality products.

c. Keeping stock of all different product spare.

d. Attending to customer service call within 24 hours.

Audio Visual Department

A. Manager, Audio Visual Systems:

a. Manage a team of sales & technical staff of Audio Visual systems.

b. Sell & promote company products & services through direct marketing, specifying the products in various projects and meeting potential clients.

c. Build a strong team of Sales and Design Engineers.

d. Ensure payment collection if a problem exists.

e. Propose new activities & products.

f. Implement Company quality system.

g. Train Company staff on selected topics.

B. Sr. Design Engineer/Design Engineer:

a. Prepare designs, quotes and proposals of AV systems.

b. Prepare projects BOQ and cost calculations.

c. Prepare submittals and systems binders

d. Prepare projects documentation, manuals & drawings.

C. Sales Manager:

a. Sell and Marketing of Audiovisual products.

b. Guide the Sales Team to prepare quotes, designs, proposals and submittals depending on the type of project/client, in-line with the company formats & professionally.

c. Specify company product and services in projects with clients and consultants.

d. Bring in new types of low current business to the company.

e. Guide Sales Team to follow up quotes with clients.

f. Ensure proper and adequate market segment coverage by employing the right number of Sales Executives.

D. Sales Executives:

a. Sell and Marketing of Audiovisual products.

b. Follow up with major account activities between clients on the quotation given.

E. Sr. Project Coordinator:

a. Follow up and monitor the progress of all company projects from start to completion & ensures optimized projects implementation.

b. Maintain & file complete documentation for every project including drawings & software programs.

c. Confirm projects progress through site visits.

d. Prepares project requirements and planning.

e. Implement Company Quality System.

f. Prepare reports (monthly, annually etc).

g. Train Company staff on selected topics.

F. Project Engineer

a. Site supervision and co-ordination before, during and after installation.

b. Request to order required equipment/systems for projects.

c. Program and commission installed systems.

d. Supervise Technicians.

e. Prepares project requirements and planning.

f. Train client's representatives on installed systems.

g. Implement Company quality system.

h. Train Company staff on selected topics.

G. Site Technicians:

a. Installation & Maintenance of Audiovisual, Security & Control Systems.

b. Troubleshooting of electronic equipment (software/hardware).

c. Implement Company quality systems.

d. Prepare reports (monthly, annual etc).

This organisation chart enables the employees to understand:

Chain of Command: As company actions are separated into departments, coordination becomes necessary for integrating personal and team initiatives so as to accomplish the objectives. Such synchronisation is achieved via systematic placement of position and duties. This type of agreement of various positions in an orderly way is called chain of command. It defines the authority of the people. It also suggests the route through which information flows in the organisation.

Unit of Command: The organisation chart clearly indicated who should report to whom and who should give orders to whom.

Span of control: Span of control refers to the number of subordinates that report directly to a manager.

Organization chart provide both employees and individuals outside the organization with a "snapshot" picture of its reporting relationships, divisions of work and levels of management.