Managing Organizational Effectiveness in Post Modern Times

Author: Alusine Melvin Moseray Kanu DA

Research on managing organizations effectively includes awareness of principles of centralization and decentralization. Both are vital in organizational functioning because centralization improves the control and coordination of specialized, independent functions and decreases the number and magnitude of erroneous decisions by less experienced managers. A strong, centralized management can prevent the sort of situation in which some divisions of the organization expand at the expense of others or the organization as a whole.

Centralized management makes centralized staff expertise more economical and easier to use. Proponents of decentralization believe that extremely large organizations cannot be managed centrally because of the quantity of information required and the resulting complexity of decision making.

Decentralization gives decision-making authority to the manager closest to the situation and therefore most knowledgeable of its details. Decentralization stimulates initiative and identification with the organization.

Under decentralization, the largest full unit of organization is small enough for its manager to fully understand, fully control, and feel part of. The manager, thus, will feel the same enthusiasm for his or her unit that an independent entrepreneur feels for his or her own business. Decentralization helps train younger managers for top posts by exposing them to making important decisions early in their careers. This ensures that the organization will always have an adequate supply of management talent. The premise is that managers are made by experience, not born with the talent. Since the distance from top to bottom is shorter, decentralization encourages the aggressive young manager to stay with the firm and advance within it.

Decentralization is said to be a process where the concentration of decision making is in a few hands. All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management. "Centralization" is the systematic and consistent reservation of authority at central points in the organization. The implication of centralization can be: Reservation of decision making power at top level. Reservation of operating authority with the middle level managers. Reservation of operation at lower level at the directions of the top level. Under centralization, the important and key decisions are taken by the top management and the other levels are into implementations as per the directions of top level. Decentralization is a systematic delegation of authority at all levels of management and in all of the organization. In a decentralization concern, authority in retained by the top management for taking major decisions and framing policies concerning the whole concern. Rest of the authority may be delegated to the middle level and lower level of management.

The degree of centralization and decentralization will depend upon the amount of authority delegated to the lowest level. Decentralization refers to the systematic effort to delegate to the lowest level of authority except that which can be controlled and exercised at central points. Decentralization is not the same as delegation. In fact, decentralization is all extension of delegation. Decentralization pattern is wider in scope and the authorities are diffused to the lowest most level of management. Delegation of authority is a complete process and takes place from one person to another. Decentralization is complete only when fullest possible delegation has taken place. There is a saying that "Everything that increases roles of subordinates are decentralization and that decreases the role is centralization" Decentralization is wider in scope and the subordinate's responsibility increase in this case. On the other hand, in delegation the managers remain answerable even for the acts of subordinates to their superiors.

Posted in: Management