BBA Principle Management Authority Relationship Study Material Notes
Table of Contents
BBA Principle Management Authority Relationship Study Material Notes: Concept of line and staff authority why the distinction is necessary to line authority staff authority advisory staff authority concurring staff authority control staff authority functional staff authority line and staff conflict view managers viewpoint of staff managers understanding authority relationship nature of line staff relationship ( most important notes for BBA I Semester Examination)
MCom I Semester Human Resource Policies Practices Study Material
Authority Relationship
Authority relationship is the cohesive force which integrates various parts of organisation for its effective functioning. Different managers perform different types of functions and therefore, need different types of authority. Some may be involved in performing those functions which contribute directly to the achievement of the organisational objectives, for example, manufacturing and marketing of products in an industrial organisation. Some managers are involved in those functions which provide support to the performance of the above functions, for example, accounting, personnel, legal, etc. Therefore, the questions arise: what should be the authority relationship between personnel at different levels within the same department and what should be the authority relationship between personnel of one department and those in other departments? In both these situations, authority relationships have to be different. In order to solve these questions, organisations prescribe different types of authority which are in the form of line and staff.
Much confusion has arisen in management literature about the exact nature of line and staff authority creating more confusion, conflict, and difficulty. Though the concept of line and staff has been present in management literature for many years, its longevity has not increased the clarity of the concept. Many authors believe that it is possible to identify a line and staff pattern within an organisation, although there is some confusion about the appropriate criteria for distinguishing them from the other. There is even a question in some quarters whether enough difference exists to usefully distinguish between line and staff of an organisation. For example, in academic institutions, teachers are of line nature but what about research staff? In hospitals, do nurses enjoy line or staff authority? Further, a personnel manager in a manufacturing organisation is termed as staff but in an employment agency, he is treated as line. Thus, there is no end of confusion. However, much confusion can be overcome by defining line and staff.
Authority Relationship Study Material
Concept of Line and Staff Authority
In conceptual framework, line and staff are defined from two viewpoints. One of the viewpoints is that they denote different functions within the organisation. The other viewpoint is that they refer to authority relationships in the organisation. According to functional approach, line functions are those that are related directly with the attainment of the organisational objectives and staff functions are those that help line functions in attaining the objectives. In this form, Allen has defined line and staff as follows:
Thus, the organisational objectives are the basic determinant of line and staff functions and with the change in the objectives, line and staff functions may change. Thus, what may be line function in one organisation may be staff function in another. For example, personnel function in an employment agency is line but it is staff in manufacturing organisation. In a manufacturing organisation whose basic objective is to produce and sell goods, production and marketing are line functions and others such as finance, personnel, legal, etc., are staff functions. Further, within a department, there may be line and staff functions, for example, in marketing, selling may be line function but market research is staff function. A person performing staff function is called staff manager or simply staff.
According to authority approach which is more relevant in analysing the problem of line and staff relationships, line and staff are two kinds of authority though the emergence of such an authority is based on the functions. According to this approach. line authority is defined as a direct authority which a superior exercises over his direct subordinates to carry out orders and instructions. The exercise of this authority is always downward, that is, from a superior to a subordinate. Staff authority involves giving advice to line managers to carry on the operation. The flow of this authority may be in any direction depending on the need of such an advice. Koontz and others have defined line and staff authority as follows:
However, in actual practice, some variations may exist and many times, the relationships between line and staff managers may be designed in such a way that staff may exercise limited authority,
Authority Relationship Study Material
Why Distinction is Necessary?
Though people have been talking that there is no use of making distinction between line and staff stating that the concept is obsolete, the distinction seems to be important, however, as a way of organisational life. The staff must be provided if the growing organisation is to accomplish its goals most efficiently and economically. People working together for a common goal must mesh their efforts together so that they complement and supplement one another. Line and staff relationships are established to guide people in the way they work together. The distinction between line and staff is rigid for theoretical and conceptual purposes, but for practical purposes, it should never be looked upon as an inflexible barrier or as an arbitrary classification. The differentiation between line and staff is necessary for the following reasons:
1 To provide Specialised Services. In managing the complex organisation in dynamic environment, a manager’s requirement of knowledge is varied and it is not possible for him to have all such knowledge. For this purpose, a manager needs the services of specialists. Such services are needed throughout the organisation. However, both managers requiring and using such services and specialists providing the services must understand the nature of relationship existing between them, otherwise they may lead to conflicts reducing organisational efficiency.
2. To Maintain Adequate Checks and Balances. Sound management requires the system of countervailing forces in the organisation so that authority delegated to individuals or groups is kept within prescribed bounds by counter-balancing authority. The system of checks and balances requires that each force or activity throughout the organisation is opposed by a counterforce which operates as a check and thereby sets up a balance of forces. Through the balance of forces, the energies of each activity are regulated.’ Effective control, in particular, requires appropriate checks and balances of this kind. The authority for planning and doing is separated to some extent under line and staff. Managers performing duties need assistance from persons who are not directly under their control.
3. To Maintain Accountability. Organisation being a cooperative endeavour requires the services of various persons. Each person has a definite role to play in the organisation. This casts certain responsibilities on him. However, the responsibility should be clearly defined in the context of contributions. Thus, persons should be identified who are accountable for end results. It ensures that persons would exercise authority for end results. The line and staff relationship makes this identification possible.
There are many reasons for misunderstanding and difficulty in identifying line and staff. Many managers fail to identify the clear distinction between line and staff which often leads to overstepping the use of authority leading to conflict between line and staff. Difficulty in identification of line and staff arises because of the confusion in the type of organisation structure, failure to identify authority limitations, and classification of line and staff.
Authority Relationship Study Material
LINE AUTHORITY
A line manager has a clearly defined role to play in the organisation which requires understanding of the nature of line authority. Line authority exists between superior and his subordinate. In the organising process, activities are assigned to individuals making them responsible for the proper performance of these activities. Authority is delegated to these individuals to perform the activities. These individuals, in turn, assign some of the activities to persons working below them in the hierarchy and delegate them authority. This process goes on creating superior-subordinate relationships in the organisation. The direct relationship between a superior and his subordinate is created through the enforcement of line relationship. Such a relationship works as follows:
1 As a Chain of Command. A command relationship exists between each superior and subordinate. Line authority is the heart of this relationship because it entitles a superior to direct the work of his subordinate. In this relationship, a superior has uncontrolled authority, except those controls prescribed by the organisation or regulated by the environmental factors, of giving orders to his subordinate and subordinate has no alternative except to obey those orders.
2. As a Channel of Communication. Line authority can be treated as a channel of communication between members of the organisation. Communication, up and down in the organisation, flows through the line relationship. Barnard has emphasised the role of line relationship as a channel of communication by suggesting that line of communication should be established and every member of the organisation should be tied into the system of communication by having someone to report to and others to report him. Such a line can be maintained easily through line of command.
3. As a Carrier of Responsibility. The line relationship carries ultimate responsibility for the work assigned. Though the process of assigning activities goes on till the level where actual work is performed by operatives, each individual is accountable for the proper performance of the activities assigned to him.
Authority Relationship Study Material
STAFF AUTHORITY
Staff authority is exercised by a staff man over line personnel. The exercise of this authority depends on the degree of authority delegated to a staff man or department. In an organisation, staff authority may be in the following forms:
1 Advisory staff authority,
2. Concurring staff authority.
3. Control staff authority, and
4. Functional staff authority.
In practice, a staff person may enjoy various staff authority related to different functions in a continuum as shown in Figure 15.1.
Advisory Staff Authority
This is the normal staff or pure advisory relationship of staff with line. It is the type of staff relationship popularly associated with the term staff authority. An advisory staff manager studies problems offers suggestions and prepares plans for the use and help of line manager. He provides advice, assistance, and information and it depends on the line manager whether these are put into action or not. Thus, accepting of advice from a staff man by a line manager is not obligatory. Therefore, a staff man relies largely on persuasion to get his ideas put into effect. Lacking the power of command, he must build confidence in his opinions and he must be sufficiently sensitive to the problems of those he would influence to win their acceptance of his proposals
A staff man charged with bringing about improvements in a specific area has two courses of action open to him: he may make a recommendation to a line manager who is directly or indirectly his boss and then rely on the manager to issue the necessary orders to put the plan into effect, or he may try to secure voluntary acceptance of his ideas from other managers without the support of formal orders transmitted down the chain of command. The second, or voluntary, approach is very common because a top manager may be either too busy to bother with an issue or he may not like to interfere with the pattern of authority delegation. The question is: in such circumstances, how does staff man accomplish his work? No doubt, he has to depend greatly on his persuasive skills but there are other reasons why his advice will be accepted. First, people are inclined to accept the advice of staff man because they regard him as an expert. Unless a line manager feels that he too is an expert in that field, he probably will give careful consideration to the opinion of a man who speaks with the authority of knowledge. Second, when a staff man has high impressive and reports at every level in the organisation, he enjoys high status and his views will seriously by reason of his status alone. Third, people may accept advice easily it hour believe that advice they reject is bound to return as a command, they often conclude that it is wiser to take the advice at the first instance. Fourth, if a staff man’s advice apparent positively, they are likely to accept it. Thus, even though a staff man may and authority whatsoever, he may still get his recommendations accepted. affects the people positively, they are likely to ac have no command authority whatsoever, he may
Authority Relationship Study Material
Concurring Staff Authority
Under certain circumstances, particularly when control over some operations 15 important, a staff man may be granted authority so that no action can be taken und concerned staff man agrees to it. For example, quality control inspector must pass on raw materials or semifinished products before they move to the next stage of production. agreement with employees over the matter of wages should be entered only after the personne manager has agreed to for it. The idea of concurring authority is that the staff viewpoints incorporated into operating decisions. It is a better arrangement because under it, he manager cannot take needless action, though at times, it may delay the action. These considerations suggest that concurring authority is granted only when the viewpoint represented by a staff man is particularly important when possible delay in action will not be serious. In order to avoid uncertainty of action under this arrangement, it is desirable that grounds on which a staff may withhold his approval of a proposal is carefully defined. For example, it may be prescribed that a finance manager cannot withhold capital expenditure simply because of his personal disapproval of capital expenditure plan but he can withhold it because funds are not available or funds cannot be arranged. In government organisations, normally wide-ranging concurring authority is granted to staff men.
Control Staff Authority
Certain units have managers with staff authority who directly or indirectly exercise control over other units in an organisation. Such managers have authority to control certain operations of line departments either directly or indirectly through policy interpretation, procedural compliance, etc. Control staff authority restrains line managers to that extent. Examples of such units are auditing, procedures for routing, quality inspection, etc. For example, quality inspection unit has authority over deciding the products which meet the quality standards though the unit may not involve itself in manufacturing process. Quality inspection work may be taken away from the manufacturing manager to be performed by a separate unit to improve the caliber of inspection, reduce the cost of inspection, and taking of benefits of specialised inspection work.
Authority Relationship Study Material
Functional Staff Authority
Functional staff authority, or simply called as functional authority, is the most extreme formal technique for extending the influence of staff personnel over line personnel. This means that a staff man can give certain orders directly to line managers in his own name instead of making recommendation to his superior or other line managers. His instructions have the same force as those that come down the channel of command. Naturally, a staff man would have functional authority only over those areas where his technical competence lies and where his opinion would probably be accepted anyway. Thus, this authority is limited. Functional authority can be defined as the legitimate right to act with respect to specific activities, processes, practices, and policies in the organisation. Koontz et. al. have defined functional authority as follows:
Authority Relationship Study Material
Functional authority arises because of three factors:
1 Generally, a superior delegates authority to the staff man to transmit information proposal, and advice directly to his subordinates. The basic purpose of such delegation is to save time and expedite the spread of information.
2. Another form of functional authority arises in those cases where a staff man not only advises or transmits information, but also shows the line managers as to how the information should be used or how the recommendations should be put into effect.
3. Sometimes, staff personnel are given authority to prescribe processes, procedures, methods, or even policy to be followed in various departments either line or staff. For example, the head of accounting department may prescribe as to how the accounts should be maintained by various departments. Functional authority is as binding as line authority, but it does not carry the right to discipline for violation in order to enforce compliance. This authority to issue orders pertains to a single function or to a limited number of functions in which the subject department is authorized to act.
Functional authority can be regarded as a part of the authority of line superior. For example, the chief executive has the authority to manage the organization. To take the advantage of specialization, he may have managers for personnel, accounting, legal matters, public relations, etc. In purely staff capacity, these managers offer advice to the chief executive, but they may be delegated some authority by him to issue instructions directly to line managers as shown in Figure 15.2. Likewise, the various line managers and their subordinate managers can themselves set up staff assistance with functional authority.
Functional authority has the same effect as line authority but it does not carry right to discipline for violation of compliance which comes within the purview of line authority Further, this authority to issue instructions pertains to a single function or limited number of functions in which the staff department is authorised to act. However, within the stall department, the head of the department has line authority over his direct subordinates Since functional authority violates the principle of unity of command, it should be restricted in order to have coordinated functioning of authority relationships. Normally, it should be limited to procedural matters concerning a function like ‘how’ and ‘when’ of that function rather than to ‘where’, ‘what’ and ‘why’ of that function. Further, functional authority should not be delegated too much down the line otherwise it will create human problems. For example, any instruction on personnel matters should come from personnel manager and not from a junior personnel officer.
Authority Relationship Study Material
LINE AND STAFF CONFLICT
Line and staff relationship is based on the assumption that both support each other and work harmoniously to achieve organisational objectives. However, there are frequent instances of conflict between line and staff in the organisation. This generates lots of friction and loss of time and consequently organisational effectiveness. Therefore, there is a need for analysing the sources of line and staff conflict and then to take actions to overcome the problem of conflict. Though placing of various organisational units which are interdependent is a source of conflict in itself, line-staff groups have other opportunities for conflicting relationship. The various factors leading to line-staff conflict can be grouped into three categories: viewpoint of line, viewpoint of staff, and nature of line-staff relationship. Let us see how these factors generate conflict.
The viewpoint of Line Managers
Line managers, who are responsible for the final results leading to the achievement of organizational objectives, feel that staff people work against them in the following ways:
1 Lack of Responsibility. It is the perception of line managers that staff people do not carry any responsibility in the organisation, but enjoy authority. This lack of responsibility makes them complacent and they do not care about the ultimate objectives of the organisation. Further, arrows of criticism will be directed towards line managers if things go wrong while the staff will get the rewards if things go well. This disparity between authority and responsibility and also between contributions and rewards is a source of jealousy between line and staff.
2. Encroachment of Line Authority. Line managers feel that staff people encroach upon their authority. They give advice and recommendation on the matters which fall within their jurisdiction. This is unnecessary interference with the working of their department. Whenever there is any encroachment on the legitimate right of any manager, the result is resentment, hostility, and open or hidden reluctance to accept advice and recommendation.
3. Dilution of Authority. There is a feeling that staff people dilute line authority. In fact, staff authority emerges out of dilution of line authority. Line managers may fear that their responsibility will be reduced because of the addition of staff thereby making their job less challenging and varied. This feeling of insecurity makes line managers suspicious of staff managers which works against a harmonious relationships between them.
4. Theoretical Bias. Often the advice and recommendation of staff people suffer from theoretical bias because of two reasons. First, they tend to think within the context of their own speciality and use the criteria prescribed in their own discipline. This may make the advice one-sided and may lack practical implication. Second, often staff people are away from the actual operational scene for which they make recommendations. Therefore, they are not able to fully appreciate the actual dimension of the problem and their recommendation may not be practicable.
Authority Relationship Study Material
The viewpoint of Staff Managers
Like line managers, staff people have their own arguments and try to find faults with line managers which result in line-staff conflict. Their arguments and problems run on the following lines:
1 Lack of Proper Use of Staff. Staff people feel that line managers do not make proper use of staff people. Quite often staff people are ignored by line managers and decisions are made without inputs from staff. Staff people are informed after the action has been taken. By virtue of his position, a line manager is a king in his area of operations; he can accept, amend, or reject the idea irrespective of its quality and practicability. Further, when something goes wrong in the area of his operation, staff person from concerned field is made scapegoat. Many specialists feel that they should be consulted during the planning stage of a programme that involves their own area of speciality. This enables them to anticipate problems and to recommend precautionary measures. As against this, line managers consult them only as a last resort
2. Resistance of New Ideas. Line managers often resist new ideas because new ideas mean that there is something wrong with their present way of working. Thus, new ideas are treated as fault-finding device in their operation and they resist the new ideas. As against this, staff people are more innovative in the area of their speciality. Because line people are reluctant to new ideas, many of the efforts of staff people go in waste.
3. Lack of Proper Authority. Staff people feel that line managers do not give enough authority to them. They contribute to the realisation of organisational objectives without really enjoying any authority. Line manager clearly holds most of the cards and, in addition, is the chief power centre in the organisation. It is not necessary to consult staff before arriving at a decision. Even when staff is consulted, it is not necessary that staff advice is put into practice. In order to take advantage of advisory role and expertise of staff, many staff specialists feel that if they have the best solution of a problem, they should have authority over line managers to force the solution. Nature of Line-staff Relationship Apart from the arguments advanced by line and staff managers against each other, the nature of line and staff authority is such that it leads to conflict between line and stafi. Following characteristics of line and staff relationship work as tension points:
4. Different Backgrounds. Line and staff people often have different backgrounds and individual characteristics. Staff people, in contrast to line, are generally younger, better educated, more poised in social interaction, more articulate, and individualistic. As a result, they often look down on the less educated line people who must have worked their way up through the organisation. These differences create an atmosphere of mistrust and hatred between them. Thus, both of them work in an environment of hostility rather than of congenial and coordinative.
5. Lack of Demarcation between Line and Staff. Though in theory, the line and sa authority is clear, often in practice, demarcation between line and staff is far Many jobs in line and staff defy description and relationship between them and are not clarified. In such cases, there is a possibility for overlap and gap in authority and responsibility which can aggravate personal relationships.
6. Lack of Proper Understanding of Authority. Even if line and staff authority is made clear in the organisation, people may fail to understand the exact nature of line, stall, and functional authority in practice which may be a source of conflict. This misunderstanding may lead to encroachment of authority either by line or by staff people. Whenever there is any evidence of such an encroachment, this is taken on personal basis which becomes the basis for further conflict. Further, staff people have to approach the common superior for getting their recommendations accepted by line people. Such a practice is interpreted as putting undue pressure on line people through the use of authority at higher level.
Authority Relationship Study Material
OVERCOMING LINE-STAFF CONFLICT
Line and staff both are necessary for the successful functioning of an organisation. Therefore, they should work together to enhance the smooth functioning of the organisation. However, some conflict may arise between the two. Since the conflict arises either because of misunderstanding between the two or because of the organisational situations in which they are working, attempts should be made to overcome these problems and situations. In particular, attempts can be directed towards: (1) understanding of authority relationships, (2) proper use of staff, (3) completed staff work, and (4) setting congenial organisational climate. Let us see how these can be achieved.
Understanding Authority Relationship The first basic approach in overcoming the problem of line-staff conflict is the proper understanding of line-staff authority relationship. This can be done in better way by following guidelines:
1 Line people have the ultimate responsibility for the successful operation of the organization. Therefore, they should have authority for making operating decisions.
2. Staff people contribute to achieving organizational objectives by making recommendations and providing advice in their respective fields. In some situations, they may be granted functional authority through which they can ensure that their recommendations are put in operation.
3. Since in most cases, solicitation of advice and acceptance of that is usually at the option of the line people, it becomes imperative for the staff to offer advice and services whenever these are not solicited but staff feels that these will be helpful in arriving at suitable decisions.
4. Barring a few exceptional situations where time factor is of utmost importance for decision making, line should be impressed upon for compulsory consultation and giving serious thinking to the advice rendered by staff.
5. Staff people should sell their ideas to line people. They should rely more on the authority of knowledge and competence rather than authority of position.
Proper Use of Staff Staff people are needed in the organisation because line people are not able to solve the problems which require special knowledge and expertise. The effectiveness of line people depends to a large extent on how they make use of staff. For making proper use of staff, following points are important:
6. There should be encouragement and education to line people as to how to make maximum use of staff effectively. Line people cannot make use of staff unless they know what a specialist can do for them. Staff people also have responsibility to let line people know how they can contribute for the better performance of line activities.
7. In order to make proper use of staff, they should not be kept busy in unimportant work because it does not serve any meaningful purpose. Instead, they should be assigned critical work in the area of their speciality.
8. Staff people should be involved at the basic stage of planning of an activity rather than when the problem becomes critical. When they are involved at the level of planning, many of the problems may not arise at all because care must have been taken against those problems.
9. If line people have taken some actions directly affecting staff activities without consulting staff people, they should be informed immediately about these. The information will help in removing misunderstandings, if any, created in the minds of staff people. At the same time, staff people should be informed about the actions going on in their area of activities and can pinpoint the drawback in action, if it exists.
Authority Relationship Study Material
Completed Staff Work
Generally, ideal staff arrangement results in completed staff work. Completed staff work is the study of a problem, and presentation of a solution, by a staff man in such a manner that all that remains to be done on the part of the line manager is to indicate his approval or disapproval of the completed action. The concept of completed action is emphasised because the more difficult the problem is, more the tendency is to present the problem to the line manager in piecemeal fashion. The completed staff work requires more rigorous exercise on the part of stall people but it results in two things: First, the line superior is protected from half-baked ideas, voluminous paper work, and immature oral presentations, Second, staff people who can put forward their ideas in the form of completed staff work! command more respect and value which help in getting their ideas accepted.
While making recommendations, staff people should study the problem carefully, listing all possible alternatives and effects of these alternatives on problem solving, and clear recommendations for action. They should also provide how recommendations can be put into practice, get clearance from persons likely to be affected by recommended action, and suggestions about avoiding any difficulties involved.
Authority Relationship Study Material
Setting Congenial Organisational Climate
Congenial organizational climate full of mutual trust and respect, self-restraint and control. coordinative approach, and mutual help is a vital factor for successful operation of any managerial process including line and staff relationship. However, two points that need special emphasis in this respect are: (1) recognition of line and staff as necessary elements for organizational functioning, and (2) recognition of need for change.
The first aspect is related to the fact that line and staff authority relationship lays the foundation for an organisational way of life. Staff is necessary to take the advantage of specialisation. Line managers should recognise the importance of staff people. They should develop a feeling that staff people help in attaining organisational objectives. On the other hand, staff people must convince the line people to sell their ideas, rather than enforcing their ideas through the use of authority. The second, aspect is related to the recognition of need for change and overcoming resistance to change. Managers in the organisation, particularly line managers, resist change specially when new way of working creates initial problem. A recommendation from staff people means a change in the operation in some way. Therefore, there is a need for analysing important factors underlying resistance to change and relevant actions to be undertaken. Normally, a change is better accepted when it fits in the overall goals and interests of the people in the organisation and they are informed and consulted before the introduction of change. Therefore, change process should be such that it creates less offence. Staff people have to share the responsibility of bringing change in their respective areas without creating undue friction in the organisation.
Authority Relationship Study Material
ARE LINE AND STAFF AN OBSOLETE CONCEPT?
Some people, particularly Fisch and Logan, have claimed that the concept of line and staff is of merely academic interest and it has no practical applicability.5 The alternative suggestion is the organisation structure based on functional responsibilities of the members. The line and staff does not serve any practical purpose rather than adding further confusion to the already complex system of interlocking relationships through which any organisation achieves its objectives. The concept of line and staff has become so popular in management literature that it is not possible to change it, though it may not have practical relevance. As Logan has observed. ‘the concept that all functions or departments of a business enterprise are either line or staff is now so firmly entrenched in management theory that any attempt to dislodge it may well seem doomed to failure. Yet it is certainly pertinent to ask, ‘how applicable to business today is this seemingly immutable principle of organisation?’ He has emphasised that demarcation between line and staff may be possible at the initial stage of the organisation, but when it grows, its functions become more and more complex, the demarcation between line and staff functions becomes progressively fuzzier until, in large organisations, it is no longer possible to state unequivocally, just who is directly engaged in furthering its objectives and who is not.
By giving numerous examples, Logan has tried to maintain that in modern organisations, the departments operating only through line relationships are by no means confined to the classic production and sales functions. In the traditional way of classifying line and staff, these two are treated predominantly line departments. There are many functional departments whose activities cannot be reconciled with the proposition that production and sales are only segments of the organisation directly concerned with furthering its prime objectives. There are many departments that exercise functional authority in their relations with other groups, thus, diluting and sharing in the responsibility for the total activities and end-product of latter units. The authors who discard the line and staff concept maintain that regardless of what the theorists may say, in practice, working relationships are designed or evolved to meet the demands of situation. In practice, the members of the organisation pay little attention to line and staff labels. They are concerned only with whom they associate in carrying out their jobs.
The above arguments present a partial view of the line and staff relationships. It is quite true that in the changing circumstances, only production and sales may not be treated as line functions. However, the basic objective of analysing the line and staff relationships is to define the relationships among various managerial personnel of an organisation. Three types of authority-line, staff, and functional are not granted to three categories of managers, but one manager may be granted all the three types of authority simultaneously. Clarity in defining these authority relationships definitely improves the working of the organisation by avoiding the gap and overlapping of authority and responsibility. Thus, it can be concluded that line and staff concept is still valid and will remain a popular managerial and organisational concept.
Authority Relationship Study Material
Service Department
Sometimes, service departments are treated as staff departments and they are called auxiliary staff. Such activities, as property management, maintenance, real estate, warehousing and supply, transportation, etc., come under the category of service. Such terms as service, facilitating, auxiliary, or support are employed to convey the nature of service activities. A service department performs auxiliary activity that facilitates the operation of other departments, contributing to their efficiency. Service departments represent grouping of activities and, thus, involve the performance of an operating function.
There are logical reasons for not using the term staff in designating these activities, though some writers do not make distinction between staff and service departments. A distinction between the service department and others lies in the occasion for its appearance. Although the span of management makes the departmentation necessary, such is not the case with the creation of service departments. The basis of creating service departments is economy of performance and desire to gain a single, clear, and definite control of policy and procedure throughout the organisation.
Depiction of Authority Relationships
In order to provide guidelines to their members, many organisations depict authority relationships through charts. In addition, they prepare manuals which may contain various policies and procedures. Understanding of these charts and manuals of an organisation is important for its members.
ORGANISATION CHART
Organisation chart is the vital tool for providing information about organisational relationships. Such a chart is a diagrammatical form which shows the major functions and their respective relationships, the channels of formal authority, and the relative authority of each manager who is in charge of each respective function. The organisation chart shows only formal relationships; the informal relationships are mostly transitory and flexible, so they are not depicted on the chart. Moreover, it depicts formal relationships only at a given point of time.
Organisation charts can be divided into (1) master chart and (t) supplementary charts. The master chart shows the entire formal organisation structure. The supplementary charts show details of relationships, authority, and the duties within the prescribed area of a department or major component of the organisation.
Authority Relationship Study Material
Information Shown by Chart
An organisation chart either shows the functions or titles of the position with or without the names of position holders. In functional chart, various boxes show the different units. subunits, and sections engaged in different functions. Each box may contain the brief resume of duties involved. In the title chart, which is most common, various positions are arranged in a hierarchy ranging from top level to lower level. However, there are no standardised titles in relationship either to organisation level or job content. For example, the person in charge of marketing, may be termed as marketing manager, director of marketing, vice-president of marketing and so on. Furthermore, he can be at the top or intermediate level of the organisation and even though he is marketing manager, he may not perform precisely the same functions as other marketing managers in other organisations. Therefore, a title may be confusing to both the workforce and the general public.
Whether charts are prepared on the basis of functions or titles, different organisation levels are used to identify organisation units. For example, units at the top level may be called as departments; those at intermediate level may be called as divisions; at lower level as sections, or sub-sections still at lower level. However, the classification may vary with the organisations.
Presentation of Organisation Chart
There are three ways in which organisation chart can be prepared: (1 vertical or top-down chart, (i horizontal or left to right chart, and (ii) circular chart.
Top-down Chart. In top-down chart, highest position is shown at the top level followed by other positions in the hierarchy or management levels. Positions shown in the same horizontal level in the chart can usually be considered to have the same relative importance in the organisation. However, before interpreting the relative importance of positions, it should be ensured that this practice is being followed in the organisation concerned as this practice may not always be followed by all organisations. The example of top-down chart is given in Figure 15.3.
Authority Relationship Study Material
In this organisation chart, detailed chart of marketing department has been shown. In the master chart, details of all the departments will be shown. The chart shows that Managing Director controls all the functional heads. Similarly, Marketing Manager controls the three managers each performing a particular element of marketing function. This, process goes on till we arrive at the level of salesmen who really get the marketing functions performed at operative level. In this chart, all position holders on the same horizontal lines have been treated as equal function-wise. Thus, Production Manager is equal to other functional managers though salary-wise, he may be different.
2. Left to Right Chart. An organization chart can be drawn to show the highest to the lowest level reading from left to right, as shown in Figure 15.4. This chart covers the same organization structure used in the previous figure to make easy comparison. In the left to right chart, organizational levels are represented by vertical columns, the flow of authority from higher to lower levels being represented by a movement from left to right.
Authority Relationship Study Material
Left to right organisation chart is not very common though it offers certain advantages. For example, it follows the normal reading habit of going from left to right, to visualise the various organisation levels clearly, simplifies the understanding of how lines of formal authority and responsibility flow, and indicates relative length of lines of formal authority. 3. Circular Chart. The various positions or functions of an organisation can be shown in circular form. In this arrangement, centre of the circle represents the position of the highest authority. Functions and positions making up the organisation structure are clustered around this centre in such a way that the closer the position of function to the centre, the more important is the function. Positions of relative equal importance are located at the same distance from the centre, that is, on the same concentric circle. Lines joining the different blocks of functions or positions indicate the channels of formal authority, the same as in other arrangements.
A circular chart has certain advantages. It portrays the actual condition of outward flow of formal authority from the chief executive in many directions; shows functions of equal importance clearly, and utilises one dimension from the centre to out-to indicate relative functional importance. However, top to bottom chart is most practicable because of its easiness. Therefore, it is followed by most of the organisations.
Authority Relationship Study Material
ORGANISATINON MANUAL
An organisation manual supplements and provides additional details to the information shown by the organisation chart. Organisation chart cannot include all the detail which is often desirable and necessary for understanding an organisation. Therefore, an organisation manual is prepared. Such a manual provides a useful supplement to the chart by including many details about the organisation, absent in the usual chart
Organisation manual is a small book containing information about the organisational objectives, authority and responsibility of various positions, and methods and procedures followed. The manual can be prepared either for the organisation as a whole or parts thereof. Therefore, there can be several manuals for an organisation depending on its size and functioning. Usually an organisation manual contains the following information:
1 Statement of organisational objectives and policies.
2. Job descriptions of major positions which include (1) functions performed, (11) authority and responsibility. (if relationships among various positions, particularly reporting relationships.
3. Organisational procedures, methods, rules, etc.
Organisation manual, prepared carefully, makes possible the availability of complete information on pertinent matters about each position, thus, increasing understanding and knowledge of the requirements, the limitations, and the relations of the position’s components within the position itself as well as the position’s external relations to the entire organisation structure. Before preparing the manual, there should be complete job analysis of all positions in the managerial cadre. Material collected for such an analysis is used to know whether the jobs are organised correctly. Later, it becomes the basis for writing manual itself. Generally, the manual is started by asking each position holder to complete a form or to answer specific questions concerning his position. The various information collected is discussed for removing ambiguity and edited properly and manual is prepared. Loose-leaf systems are generally adopted because they make it possible to incorporate changes more easily.
Uses of Chart and Manual
Organisation chart and manual serve various organisational purposes. This is why most of the large organisations prepare chart and manual. Their major uses and functions are as follows:
1 Management Tool. An organisation chart or manual depicts the nerve of the organisation and hence a vital tool of management. Chart and manual serve as tools by providing the broad picture of authority and responsibility relationships. Thus, they provide clarity in interactional pattern of the organisation. It implies that a person who joins an organisation may easily locate his interactional pattern, that is, to whom he will give what type of information and from where he will get communication.
2. Avoidance of Overlapping and Duplication. Organisation chart and manual can be used to avoid overlapping of authority and responsibility and duplication of work. Often these are prepared after careful analysis of jobs and position requirements in the organisation. Such an exercise resulting in chart and manual serves two purposes. First itu ensures that all activities are covered properly by various positions and there is no duplication of activities. If there is any, corrective action can be taken. Second, chart and manual will bring out very easily the organisational weakness, if any. If anything is hampering, measures can be taken to overcome that. In the absence of organisation chart and manual, many of the weaknesses will go unidentified. However, it should be borne in mind that mere preparation of chart and manual will not solve all procedural problems. Some specific actions are required to overcome these.
3. Solution of Organisational Conflicts. Organisation chart and manual provide ready reference for solving organisational conflicts. Many conflicts of jurisdictional and procedural nature take place in the organisation either because of misunderstanding or because of lack of clarity in authority and responsibility. Such conflicts can be solved with the help of organisation chart and manual if they have been prepared carefully. Often they show the authority relationships and procedures. Thus, these can be used as the last reference for solving the conflicts arising because of these factors.
4. Training Guides. Organisation chart and manual can be used as an integral part of training. They together normally prescribe what one is expected to do in the organisation. They also act as the information centre. Therefore, they can be used as a tool of on-the-job training. Further, they are also helpful in pinpointing the type of training that a person should receive in order to perform his task properly in the organisation. 5. Reference for Outsiders. With clarity of authority and responsibility, organisation chart and manual serve as reference for outsiders in dealing with the organisation. Outsiders who are strangers to the organisation may know very easily with whom they have to interact for a particular work. Thus, this saves lot of time both for outsiders and the organisation. Moreover, outsiders form better opinions about the organisation. Such opinions may go a long way in serving the organisational purposes. However, better opinions may not be formed purely because of organisation chart and manual but certainly they are important aspects for this.
Limitations of Chart and Manual Organisation chart and manual have their own limitations and, therefore, these should be used with certain precautions. Though some of the limitations can be overcome by preparing them properly, some of the limitations inherent in the system will continue. Following are the major limitations of chart and manual:
5. Rigidity. Organisation chart and manual provide rigidity in the organisational functioning. The rigidity can be expressed in two ways so far as organisational functioning is concerned. First, many changes take place in the organisation while chart and manual are in written form. Therefore, incorporation of changes takes time. Changes can be brought about in the form of addenda. Thus, these tools become out of date and cumbersome if many changes are incorporated in the form of additions. Second, sometimes written documents demotivate people to bring changes. Thus, many of the organisational changes, necessary for the organisational effectiveness, do not take place simply because of this reason. In this context, Newman has observed long back that ‘the sanctity of printed words tends towards inflexibility and more difficulty.’
6. Partial View. Organisation chart and manual represent only the limited picture of the total organisation and its functioning. They show only official relationships and procedures. It is a well-known fact that besides formal relationships, informal relationships also exist in the organisation and actual behaviour of the members takes place in the context of both these relationships. In order to control the behaviour of the members in the organisation, Is necessary that managers should know the actual interactional patterns rather than merely formal ones. However, such actual interactional patterns are not provided by organisation chart. On this feature of organisation chart, Dale has commented that charts show the relationships which are supposed to exist but which may not be the fact.”
7. Inappropriate Description. Organisation chart particularly provides inappropriate description of authority. The exact quantum of authority and responsibility is not shown by the chart. It merely depicts the reporting relationships, that is, who reports to whom. It may place many unequal individuals at equal places or equal individuals at unequal places. There are many characteristics of a position which determine its status vis-a-vis others; organisation chart considers it only in terms of reporting relationship. Thus, the organisation may equate a personnel officer with production manager in terms of reporting relationship but both may differ considerably in terms of salary, perquisites, and authority.
8. Psychological Problems. Organisation chart may create psychological problems among individuals in the organisation. A chart puts people in superior or subordinate positions more prominently. Therefore, a feeling of superiority or inferiority may develop which may work against the team spirit. The creation of feeling of superior and subordinate may create friction and bickering. It may be noted, however, that superior-subordinate relationships exist because of design of organisation structure and not becasue of organisation chart. It merely places them in a formal way.
Many of the problems of organisation chart and manual can be overcome by designing them properly. Other problems can be overcome by creating proper environment. In order to get the proper use of organisation chart and manual, they must be kept up-to-date by incorporating the necessary changes from time to time so that these work like mirrors of the organisation structure.
Case: Prashant Hosiery Private Limited
Prashant Hosiery Private Limited (PHPL) was in the business of manufacturing and marketing of hosiery goods. These goods were sold in India and exported overseas. There were three plants-A, B, and C. Plants A and B were manufacturing goods for Indian market. Subsequently, another unit in plant B was added to manufacture goods for export. The existing plant B was named as B-1 and additional unit was named as B-2. Each plant was looked after by a plant manager. The overall management of the company was handled by three directors. Managing Director (MD) was the chief decision maker. Director Export and Production (DEP) had functional relationships with all the plant managers. Director Civil and Sales (DCS) looked after sales excluding export.
Purchase of raw materials was decentralised and each plant manager used to make purchases of raw materials according to his plant’s need. However, this system led to malpractices particularly in terms of purchasing inferior quality raw materials even at higher prices. One plant manager was terminated because of this malpractice. In order to improve the raw materials purchase, PHPL appointed a retired army officer as Manager Administration (MAdmn). The first step of MAdmn was to centralise the raw materials purchase for all the plants. After about three months, the plant managers felt aggrieved: their present position was not as prestigious as it used to be before purchase centralisation; and their managerial ability and integrity were doubted. The plant managers were in close touch with the directors and MD but none of them dared to criticise the reallocation of the purchasing job. However, non-achievement of production target became quite frequent. Purturbed by this situation, MD called a meeting of all three plant managers. In the meeting. all of them asserted that raw materials could not be made available well in time. In many cases, the quality of raw materials was not up to the desired level. Based on this argument, MAdmn was called in the meeting to explain his stand. He asserted that the plant managers were expected to notify their requirements for raw materials at least two days in advance but in many cases, requisition note for the raw materials came on the same day. In such a case. he was forced to purchase raw materials from the local market at a comparatively higher price but the quality of such materials had never been so low as alleged. According to DEP, centralisation of purchase did not result in any significant production loss. The plant managers further complained that too much reports were required under centralised purchase system. Preparing these reports took lot of their time. They further complained that there was a need for change in the existing reporting system. Plant managers of plant B and Cheld the view that spinning, dyeing, and printing masters (all technical personnel of the plant concerned) should work under them and report to them instead of reporting directly to DEP on production/technical matters. They felt that with this reporting system, they could get better work from such personnel, leading to imporvement in productivity and quality of products.
While taking outside activities’, that is, purchase of raw materials from plant managers, MD thought that they would be able to concentrate fully on production schedules. This would result in higher productivity and reduced cost. But frequency of failures to meet production targets increased, wastage increased, and increasing conflict between plant managers and MAdmn led to less coordination and frequent disturbance.
QUESTIONS
1 Discuss the nature of authority relationships in Prashant Hosiery Private Limited.
2. What suggestions will you offer to MD to overcome the problem?
