Organising an Office
UNIT 4 ORGANISING AN OFFICE

Structure

4.0 Objectives
4.1 Introduction
4.2 Office Organization
4.2.1 Importance of Office Organization

4.3 Forms and Types of Organizations

4.3.1 Line Organization
[Link] Advantages of Line Organization
[Link] Disadvantages of Line Organization
4.3.2 Functional Organization
[Link] Advantages of Functional Organization
[Link] Disadvantages of Functional Organization
4.3.3 Line and Staff Organization
[Link] Advantages of Line and Staff Organization
[Link] Disadvantages of Line and Staff Organization
4.3.4 Committee Organization
[Link] Advantages of Committee
[Link] Disadvantages of Committee

4.4 Centralization and Decentralization

4.4.1 Measuring the Degree of Decentralization in an Office
4.4.2 Advantages of Centralization
4.4.3 Disadvantages of Centralization
4.4.4 Advantages of Decentralization
4.4.5 Disadvantages of Decentralization
4.4.6 Factors Affecting Decentralization
4.4.7 Difference Between Delegation and Decentralization
4.4.8 Difference Between Centralization and Decentralization

4.5 Let Us Sum Up

4.6 Keywords
4.7 Terminal Questions

4.0 OBJECTIVES
After studying this unit, you will be able to:

Ɣ describe the term office organization;

Ɣ understand the meaning and importance of office organization in an
enterprise;
Ɣ explain various forms and types of organizations;
45

 
Office Organization Ɣ differentiate between centralization and decentralization; and
and Management
Ɣ differentiate between decentralization and delegation.

4.1 INTRODUCTION
Organization is essential for any group activity. We spend majority part of
our lives in organizations. Organizing is one of the important functions of
office management. Once the managers decide the office objectives, next
logical step is to give a practical shape to the activities needed to accomplish
these objectives. In organizing, various activities required to be performed
are determined, similar activities are grouped together and then these
manageable group activities are allocated to individuals. Authority
commensurate to responsibilities is also accorded to individuals. Though,
individuals perform diverse functions, yet effective organization provides for
integration of these diverse efforts. Organization is akin to human body. As
different systems (such as respiratory system, nervous system,
circulatory system, digestive system, etc.) have been assigned diverse
functions in human body but all these systems function in a coordinated
manner, in a similar fashion, an office may have different departments or
divisions or functions but all should work in an integrated manner to run the
organization smoothly.

In this unit-4 , we will learn about the various facets of office organization.
First, we will discuss about what does office organization mean and what is
the importance of office organization in an enterprise. You will further learn
about various forms and types of organizations. In concluding section,
concept related to centralization and decentralization has been explained.
You will also learn about difference between centralization and
decentralization along with delegation and decentralization in this section.

4.2 OFFICE ORGANIZATION

Different authors have defined term organization differently. Also, term
organization is used in two ways. First, it has been defined as the organizing
function of office management process and second, it has been defined as a
network of interrelationships of individuals and jobs called organization
structure. Organization structure is the result of organizing activity or
process. Organization is the tool with which office managers put plans in to
action.
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JURXSVKDYHWRSHUIRUPZLWKWKHIDFLOLWLHVQHFHVVDU\IRULWVH[HFXWLRQWKDWWKH
GXWLHV VR SHUIRUPHG SURYLGH WKH EHVW FKDQQHOV IRU WKH HIIHFWLYH V\VWHPDWLF
SRVLWLYHDQGFRRUGLQDWHGDSSOLFDWLRQRIWKHDYDLODEOHHIIRUW” – Oliver Sheldon
According to Davis, “2UJDQL]DWLRQ LV D JURXS RI SHRSOH ZKR DUH
FRRSHUDWLQJ XQGHU WKH GLUHFWLRQ RI OHDGHUVKLS IRU WKH DFFRPSOLVKPHQW RI
46 FRPPRQHQG”.


Organising an Office
As per Terry, “2UJDQL]DWLRQ LV WKH HVWDEOLVKLQJ RI HIIHFWLYH EHKDYLRUDO
UHODWLRQVKLSV DPRQJ SHUVRQV VR WKDWWKH\ PD\ ZRUN WRJHWKHU HIILFLHQWO\ DQG
JDLQSHUVRQQHOVDWLVIDFWLRQLQGRLQJVHOHFWHGWDVNVXQGHUJLYHQHQYLURQPHQWDO
FRQGLWLRQVIRUWKHSXUSRVHRIDFKLHYLQJVRPHJRDORUREMHFWLYH.”

Koontz and O’Donnell defined organization as “WKHVWUXFWXUDOUHODWLRQVKLSE\

ZKLFKDQHQWHUSULVHLVERXQGWRJHWKHUDQGWKHIUDPHZRUNLQZKLFKLQGLYLGXDO
HIIRUWLVFRRUGLQDWHG.”

Thus, organizing is the process of arranging and structuring of organizational

work specialy a work related to office to accomplish organization’s goals and
organizational structure exhibits formal arrangement of jobs within an
organization. Therefore, formal organization is a deliberate coordination of
people in the organization to combine their efforts for common causes.
Organizing process involves determining the nature of tasks, grouping these
tasks as per similarity in nature, assigning authority to do these tasks and
integrating the diverse tasks. Organization is the structural framework, which
provides for integration and interrelations of tasks.

As there are diverse activities being performed by large number of

individuals in an office of any organization, it is essential to harmonize the
work of these individuals in order to achieve efficiency and effectiveness in
office operations. Higher the number of people working in office, more is the
need for office organization for a smooth functioning of office.

As per Leffing well, “D ZHOORUJDQL]HG RIILFH PDNHV LW SRVVLEOH IRU WKH
PDQDJHPHQW WR SODQ LWV RSHUDWLRQV LQWHOOLJHQWO\ WR SXW LWV SODQ LQWR HIIHFW
VXUHO\ WR IROORZ WKHLU SURJUHVV FXUUHQWO\ WR GHWHUPLQH WKHLU HIIHFWLYHQHVV
SURPSWO\ WR DSSUDLVH WKH UHVXOWV ZLWKRXW GHOD\ DQG WR FRRUGLQDWH DOO WKH
DFWLYLWLHVRIWKHEXVLQHVV´

Thus, office organization is the process of collecting and safeguarding useful

information from internal and external sources, effectively coordinating
various office resources to achieve office goals by maintaining harmonious
relations between work and employees with a view to regularly monitoring
progress for earning higher profits. Office organization process involves
decisions about following key aspects:

1) Work specialization: It is the process of dividing work activities into

separate job tasks.
2) Chain of command: It is the continuous line of authority extending
from top to bottom of the organization. It clarifies the reporting
relationships.
3) Departmentalization: It refers to the basis used for jobs grouping to
make departments.
4) Span of control: It is the number of employees who can be effectively
and efficiently supervised by a manager.
47

 
Office Organization 5) Centralization and decentralization: It refer to degree of dispersal of
and Management
decision-making authority across different levels of organization.
6) Formalization: It is the extent to which jobs are standardized and the
rules and procedures are enforced in the organization.

4.2.1 Importance of Office Organization

1) Achievement of Office Objectives: A good office organization helps in
proper coordination of all activities of the organization, which ultimately
helps in achievement of objectives.
2) Reduces Conflicts: A good office organization establishes clear
authority and responsibility relationships in the office. Each employee
knows what is expected from him/her and interdependence of jobs is
minimum. All this helps in reducing conflicts in office.
3) Minimum Duplication of Efforts: In a good organization, utmost care
is taken to ensure that no essential activity is left out and no activity is
duplicated. Overlapping and duplication of work is reduced due to clear
identification and assignment of activities.
4) Optimum utilization of Office Resources: Good Organization structure
helps in optimum utilization of resources by allocating them to the points
where they are most needed. A good organization makes employees
know their authority and responsibilities in unambiguous manner leading
to optimum utilization of human resources. It helps in putting right
person at right place. It ensures smooth flow in office operations by
avoiding bottlenecks, reducing idle time and reallocating idle machines.
It helps in effective administration.
5) Facilitates Growth: Sound organization facilitates efficient
management, which results in growth and expansion of office.
6) Effective Communication: Good structure establishes clear lines of
communication in office. It ensures effective communication inside
office as well with the other constituents of the organization. Clear lines
of communication along the flow of authority make internal
communication unambiguous. Organization structure also provides
pathways for external communication.
7) Facilitates Delegation and Decentralization: Good office organization
reduces the workload of senior managers by facilitating delegation and
decentralization of authority. This leaves more time to managers for
effective planning and good policymaking.

4.3 FORMS AND TYPES OF ORGANIZATIONS

In offices, task allocation, work division, delegation of authority, span of
control and distribution of authority can be done in several ways. Thus,
several different organization structures have evolved as the result of such
48 decisions. Each one of these has distinct characteristics, advantages, and


Organising an Office
disadvantages. No one is better than the others rather suitability of a structure
is dependent on the need of the office. Four main types of office
organizations are:

1. Line organization

2. Functional organization
3. Line and Staff organization
4. Committee organization

4.3.1 Line organization

Line organization is the oldest and simplest type of organization. In this
organization, line of authority or line of command flows from top to bottom.
This line of authority is unbroken and vertical. As per J. M. Lundy, “/LQH
RUJDQL]DWLRQLVFKDUDFWHUL]HGE\GLUHFWOLQHVRIDXWKRULW\IORZLQJIURPWKHWRS
WR WKH ERWWRP RI WKH RUJDQL]DWLRQDO KLHUDUFK\ DQG OLQHV RI UHVSRQVLELOLW\
IORZLQJLQDQRSSRVLWHEXWHTXDOO\GLUHFWPDQQHU” This organization is also
called as scalar organization due to this scalar chain of command. In this
organization, communication flow is along the lines of command. Every
person is superior to all the persons below him and is responsible for their
conduct. He himself is accountable to his superior. This is a vertical structure
where every superior delegates authority to his subordinates. Authority flows
downward and is delegated to all the persons responsible for the execution of
work. On the other hand, responsibility flows upwards. Line organization is
either Pure Line Organization or Departmental Line Organization. The
various features of line organization are following:
1. It is one of the simplest forms of organization.
2. Line of authority flows vertically from top to bottom.
3. Specialized and supportive services are absent in this type of
organization.
4. Line officers can maintain unity of command and unified control.
5. Line officers take independent decisions in their respective areas.
6. Authority and responsibility for each position are clear.
7. Efficient communication flow.
8. Brings stability to office.

[Link] Advantages of Line Organization

Various advantages of line organization are following:
1) Simplicity: Line organization is the simplest organization to establish
and understand. Everyone knows whom to report and who will be
reporting to him. Each employee has only one boss.
2) Clearly identified authority and responsibility: In line organization,
authority and responsibilities associated with a particular job position are
clearly defined. Authority should be commensurate to the work assigned. 49

 
Office Organization 3) Better co-ordination, control and supervision: Line authority inherent
and Management
in line managers makes them overall in-charge of the department. This
hierarchical arrangement helps in achieving effective co-ordination as
the manager being in charge can direct, supervise and control all the
activities of his subordinates. In addition, number of subordinates under
one supervisor are lesser in line organization.
4) Effective communication: As communication flow is along the chain of
command, there is always a direct link between the superior and
subordinates leading to effective communication.
5) Economical: As there are no specialists hired in line organization to
advise line managers, cost of operating such organization is substantially
less.
6) Quick decisions: Line manager is the only in-charge of the department.
He has to make all decisions by himself, as he has no staff specialists to
advise him. Non-availability of specialists for consultation fastens the
decision-making process.
7) Unity of command: Line organization operates in accordance to
principle of scalar chain, where each employee is in command of only
one superior. Unity of command ensures clear instructions to the
employees.
8) Executive development: Line managers are responsible for making and
executing all types of decisions related to their division. This helps them
in learning variety of tasks and develops their capabilities.
9) Flexibility: Line organization are flexible as line manager is responsible
for all important decisions. He can easily accommodate any changes, if
situation warrants.

[Link] Disadvantages of Line Organization

Various advantages of line organization are following:

1) Over reliance on line managers: Line organizations are too much
dependent on the line managers. Line organizations are only as good as
the decisions of the line executives.

2) Excess work for managers: As line managers are expected to discharge
all the duties of their departments single handedly, they are always
overburdened. This workload increases with expansion of the offices
leaving little time to them for important work.

3) Lack of expertise: A line organization does not have staff to advise
them on important matters. Line managers take decisions with regard to
every aspect of their division but as they cannot be experts in each aspect
of the office, quality of decisions may suffer.

50


Organising an Office
CHIEF EXECUTIVE

Marketing Finance Human Resource Production

Manager Manager Manager Manager

Deputy Deputy
Manager A Manager B

Supervisor Supervisor Supervisor

Workers Workers Workers Workers

Figure 4.1: Line organization structure

4) Scope of nepotism: In line organization, there is ample scope for

nepotism or favoritism as managers allocate work according to their
whims, preferences, relationship or friendship and not merit exclusively.
It is quite possible that performance of subordinates may not be
evaluated objectively and favors may be given to undeserving persons.
5) Authoritative leadership: Line organization may lead to autocratic
leadership and monopoly tendencies in managers. Managers may take
decisions in an arbitrary manner and may misuse their authority. This
can be damaging to the organization.
6) Lack of initiative: In line organization, subordinates may lack initiative
in giving any creative and innovative solutions to problems as they lack
any authority in decision-making.
7) Instability: In line organization, performance of office is dependent on
few key individuals. If these individuals leave office on any account, it
may lead to instability in office. Also, as lower level employees are not
so involved in decision making, there is a problem of succession.
8) Inflexibility: Line organization may turn rigid and inflexible if rules and
regulations are enforced too rigorously that they can rarely change.
9) Problems of co-ordination: As different departmental heads have
authority to run their departments, there may arise problem of co-
ordination among various departments.

4.3.2 Functional organization

F W Taylor advocated that functional authority not the departmental
authority should direct departmental work. He also felt that it is unwise to
overload line manager with all the responsibilities of the department.
Functional organization is based on the concept of functional Authority of 51

 
Office Organization managers. In functional organization, each employee instead of receiving
and Management
orders form one supervisor/line manager receives order from a group of
specialist supervisors, each of whom is an expert in a particular domain/
area/function.

The following diagram shows the functional organisation at the top levels.

Line Authority
Functional Authority
Board of Directors

Chief Executive

Personal Finance
Manager Manager

Production Sales
Manager Manager

Production Control Plant Service Advertisement Sales Promotion

Manager Manager Manager Manager

Factory Factory
Manager (A) Manager (B) Area Sales Area Sales
Manager Manager

Figure 4.2: Functional organization structure

In functional organization, entire work in the organization is divided in

various departments. Similar type of work is put under the control of a
departmental manager, also called functional manager YL] records manger,
service manager, statistics manager etc. These functional managers are then
responsible for carrying out various activities of their respective functional
area/departments wherever these are performed in the organization. For
example, maintenance manager will be responsible for all the maintenance
related work in entire organization and human resources manager will be
responsible for all personnel related matters throughout the organization.
Thus, a subordinate anywhere in the organization will receive commands
directly from various functional managers. The various features of functional
organization are following:
x Total work of organization is divided into specialized functions.
x Each function is to be performed by a functional expert.
x Functional manger/ functional in charge has the authority over all the
employees throughout the organization for his functional area.
x Functional specialists have considerable independence in their functional
52 domain.


Organising an Office
[Link] Advantages of Functional Organization
1) Benefits of specialization: Functional organization can benefit
immensely from the specialized advice of functional experts as they
provide the guidance to the employees throughout organization.
2) Enhanced efficiency: This type of organization ensures enhanced
efficiency as the workers operate under the expert and competent
personnel and perform limited operations.
3) Limited duties: Managers are not overburdened in functional
organization as they cater to only their area of expertise and are not
discharging all the duties as in line organization.
4) Scope for growth: Scope for growth and expansion is more in functional
organization as functional managers employed at various levels of
organization help the organization to grow as per the need.
5) Flexibility: Functional organization is flexible as it allows changes in the
organization without affecting the performance of the organization in a
big way. A function from lower levels in a department can be removed
easily without much impact on the performance of same function in other
departments.
6) Relief to top executives: Unlike line organization, managers are not
burdened in functional organization, as experts are there to help in taking
decision in specific functional areas.
7) Economy of operations: Employment of specialists help in controlling
wasteful activities and ensures optimum utilization of human and other
resources like office accommodation, equipments and machines, etc.
8) Better supervision: Functional managers, being expert, have better
planning and execution skills in their area of expertise. They are also
able to provide improved level of supervision.

[Link] Disadvantages of Functional Organization

1) No Unity of Command: Functional organization violates the principle
of ‘unity of command’. In this organization, a subordinate receives
instructions from multiple bosses. These bosses may put pressure on the
worker to give priority to work pertaining to their functional domain.
This leads to conflict and confusion in the mind of the subordinate as to
whom to obey and whom to ignore.
2) Expensive: Hiring of multiple functional experts for managing various
functions is a must in functional organization. This increases the
overhead expenditure of the organization due to higher remuneration of
the experts. Small organizations may find it financially unviable to have
so many experts.
3) Difficulty in Fixing Responsibility: Absence of unity of command
makes it difficult to fix responsibility for any slackness in work. 53

 
Office Organization Subordinates may engage in blame game and a tendency to shirk
and Management
responsibility may arise in the organization.
4) Lack of Co-Ordination: There may arise the problem of coordination
among different functional experts especially whenever a decision is to
be made after consulting several specialists. Specialists may try to give
more importance to their work and this results in conflicts among
specialists.
5) Slacked Discipline: Absence of unity of command and direction in
functional organization leads to problem of discipline among workers
and lower-level supervisors.

4.3.3 Line and Staff Organization

Line organization is characterized by concentration of authority and control
in line managers and functional organization is characterized by splitting
authority into various functional managers and having lose control over
subordinates. In order to overcome the shortcomings of line organization and
functional organization, line and staff organization has been proposed. In line
and staff organization, line managers have line authority over the
subordinates and they get the advice of the staff specialists whenever needed.
Staff is in an advisory role in organization and line managers take final
decisions. Staff officers help line managers in solving problems effectively.
Personal secretary to chief executive officer is a staff official. Staff is of three
types:

a) Personal Staff: includes personal assistants and secretaries to CEO, MD,

GM, managers etc. Personal staff gives advice and assistance to line
managers and is attached to line managers.
b) Specialized Staff: such as lawyers, chartered accountants possess
specialized knowledge and give specialized services to organization.
c) General Staff: comprises of various experts rendering valuable advice to
the top management on different matters.
The various features of line and staff organizations are following:

1. Line and staff organization is a combination of line organization and

staff organization so as to reap benefits of both.
2. Line and staff organization is more complex than pure line organization.
3. Availability of expert advice on important matters makes line and staff
organization more efficient.
4. Staff specialists are attached to different functional areas.
5. Two lines of authority, line authority and staff authority, flow in
organization at any given point.
6. Division of work and specialization. Takes place in line and staff
organisation.
7. Staff is only in advisory capacity and line manages retain the command
54 authority over subordinates.


Organising an Office

CHIEF EXECUTIVE OFFICER

ECONOMIST LEGAL ADVISOR

FINANCE MANAGER PRODUCTION MANAGER FINANCE MANAGER

FOREMAN FOREMAN FOREMAN

WORKERS WORKERS WORKERS

Note: Straight lines represent line and broken lines represent staff.
Figure 4.3: Line and Staff organization structure

[Link] Advantages of Line and Staff Organization

1) Better Decisions: Presence of specialists facilitates line managers with
expert knowledge which help in taking better decisions for the benefit of
organization.
2) Relief to Line Managers: Presence of staff managers provides much
relief to line managers. Line managers can concentrate on routine and
administrative matters and execution of plans, whereas staff tackles with
technical and specialized work.
3) Better Management: Division of line authority and functional authority
ensures that line and functional managers concentrate and focus on the
work in their own area.
4) Flexibility: This organization is relatively more flexible than other
organizations. More staff can be added as per the need of the
organization without disturbing line authority. Also, stability of
organization is not dependent on few top line managers.
5) Advancement of research: Experts in the organization can undertake
research and development work for betterment of organization such as
through product improvements, by introducing improved methods of
doing work or by introducing economical means of production.
6) Training of Managers: Availability of expert advice of staff proves to
be an excellent training ground for Line managers. Young staff managers
also learn and acquire more expertise in their respective areas.

[Link] Disadvantages of Line and Staff Organization

1) Conflict between line and staff: Conflict between Line and staff
officials is the main problem of this organization. Staff managers always
complain that their advices are not properly implemented. On the other
hand, line managers complain that staff does not give sound advice, as
the ultimate responsibility of doing work is for line. Line also accuses 55

 
Office Organization staff of taking credit for success and blaming line for any failures.
and Management
Conflicts are also due to the age differences. Staff is generally young
experts and line managers are elder to them. Line managers may have
ego problems in taking advice from someone much younger to them.
2) Expensive: This organization may prove to be costly for smaller firms as
it is expensive to hire specialists due to their high remuneration.
3) Confusion over line and staff authority: In this organization, line and
staff authorities are flowing simultaneously, which may confuse the
workers as to whom they should obey. Also, line managers may consider
themselves superior to staff to which they may object. This may pose
hurdle in effective functioning of the organization.
4) Lack of sound advice from staff: Staff specialists may not give sound
advice, as they are not accountable for the outcome. At times, over
reliance on staff may also prove fatal as staff managers may give wrong
advice. They may be ineffective due to lack of command authority.
5) Dissatisfaction among line managers: In line and staff organization,
Staff may steal the show for higher returns. This may leave line
managers dissatisfied.

4.3.4 Committee organization

In committee form of organization, a group of managers come together to
discuss a problem, decide a course of action and then recommend solutions to
line managers. Problems discussed in committee are possibly those which
cannot be solved by an individual. Hence, committees are constituted to get
better insights and better solutions to the problem. Committees work on the
principles of collective thinking, participative management, integration of
ideas, democratic management, corporate judgment and common decision. A
committee is not a separate type of organization but a way of assigning a
group of competent persons to line departments for advice and guidance
within some type of organization structure as discussed above.

Figure 4.4: Committee organization structure

Committees are generally used in large complex organizations to solve

complex multifaceted problems effectively. In a committee, competent,
experienced experts exchange ideas. In addition, opinions of the committee
members are pooled together through discussions to take common decisions.
56


Organising an Office
For example, purchase committee will finalize the purchase requirements of
each department. Committees provide a platform for exchanging ideas, for
generating solutions, and for developing organizational policies. Committees
can be standing or permanent, ad hoc or temporary, executive or advisory,
and formal or informal.

[Link] Advantages of Committee

The various advantages of Committee are following:

1) Pooling of diverse opinions: As the committee members are from

diverse areas of expertise, problem can be discussed in a multifaceted
manner. Mangers with varied abilities have different viewpoints and
values and are able to highlight multiple aspects of the problem. Pooling
of diverse opinions may help in making a realistic estimate of the
problem.

2) Better co-ordination: Deliberations and discussions among different

department heads lead to better co-ordination among different
departments as such discussions lead to better understanding of the
difficulties faced by other departments.

3) Balanced views: Committee deliberations lead to balanced view of the

problem at hand. Committee decisions are based on common agreement
among members for the solution. Such common view curbs the tendency
of any department head to over emphasize his agenda by ignoring the
genuine demands of other departments.

4) Motivation: Committees are composed of senior as well as junior

managers. Junior managers may get motivated due to the recognition and
opportunity to be a part of decision-making. It may lead to high morale
and improved performance of the subordinates.

5) Dispersion of power: Committees make use of splintered authority. A

single manager cannot take decisions that are taken by committees as no
manager is authorized to make strategically important decisions single
handedly. Such dispersal of authority saves organizations from misuse
of authority.

6) Better acceptance of decisions: Generally, senior managers such as

department heads are the members of the committees and committees’
decisions are taken in wider perspective of organization. Hence, the
probability of acceptance of committee decisions is higher than the
decisions taken by any individual manager.

7) Better communication: Committee members can share the background

of committee decisions as well as the correct information about the
decisions with other members of the organization leading to better
communication and acceptance of the decisions.
57

 
Office Organization 8) Executive training: Committees prove to be a good platform for
and Management
executive training. Executives participate in committee deliberations and
through that learn interpersonal behavior, communication, teamwork,
cooperation, negotiations and group dynamics. In addition, they learn to
understand and solve office problems in a multifaceted manner and learn
the process of decision-making.

[Link] Disadvantages of Committee

Various disadvantages of committee are following:

1) Delay in decision-making: This perhaps is the main drawback of

committee form of organization. In committees, members take decisions
after much deliberation. Meeting has to be fixed as per the suitability and
availability of all the members. Agenda of the meeting is issued to all
members well in time. After that, members come and discuss the matter.
This entire process takes lot of time and decisions are delayed and may
lead to loss of opportunities.
2) Expensive: Holding committee meetings is expensive as arrangements
have to be done for holding meetings. A large sum of money is needed to
pay for refreshments, conveyance, daily allowances etc.
3) Compromised decisions: Generally, committee decisions are taken
through consensus. In order to reach consensus, committee may resort to
policy of compromise to reach unanimity. In such a scenario, committee
decision may be less than optimal and only an acceptable decision.
4) No accountability of decisions: Committee decisions being group
decisions, accountability for wrong or sub optimum decisions cannot be
fixed. Thus, committees may lead to inefficiency in organizations.
5) Domination by minority: When the committee decisions are to be taken
unanimously, some dissenting individuals try to push their agenda and
force committee to take compromised decisions. In addition, at times,
vocal members try to dominate committee deliberations and ignore the
viewpoint of other members. Such acts may leave other members
frustrated and discontented. Such decision will not be in the best interest
of the organization.
6) Limited effectiveness: Committees are not effective always and thus
their role is limited in organizations. Whenever, there is a need to make
quick decisions, committees prove ineffective. In addition, for routine
decisions, committees are ineffective. Committees are most effective in
dealing with strategically important matters, inter personal departmental
situations and grievance redressal.
7) Misuse of Committees: At times, committees are formed just to avoid
action or delay an action.
Not every organization is suitable to all the offices. The choice of the
58 organization is dependent on nature and size of office, period of


Organising an Office
establishment, continuity of workflow, geographical dispersion and staff
strength and degree of mechanization.

Check Your Progress A

1. Define office organization. Describe the two ways of defining

organization.
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2. Enumerate the key elements of office organization.
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3. Describe the features of Line and Staff organization.
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4. Committees provide a platform for exchanging ideas”. Comment.
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4.4 CENTRALIZATION AND

DECENTRALIZATION
Concept of centralization and decentralization is related to diffusion of
decision-making authority in the offices. These terms are opposite to each
other. Centralization of authority implies concentration of decision-making
at top levels of office. It refers to the concentration of powers at higher levels
of management. On the other hand, decentralization is the diffusion of
decision-making powers to middle and lower levels of management or the
degree to which middle and lower-level employees have their say in 59

 
Office Organization decision- making or actually make decisions. Giving more authority to
and Management
employees to make decisions empowers them.

Allen defines “&HQWUDOL]DWLRQ DV V\VWHPDWLF DQG FRQVLVWHQW UHVHUYDWLRQ RI

DXWKRULW\ DW FHQWUDO SRLQWV ZLWKLQ DQ RUJDQL]DWLRQ 'HFHQWUDOL]DWLRQ DSSOLHV
WRWKHV\VWHPDWLFGHOHJDWLRQRIDXWKRULW\LQDQRUJDQL]DWLRQZLGHFRQWH[W.”

4.4.1 Measuring the Degree of Decentralization in an office

Different offices may have varying degrees of decentralization. As per Ernest
Dale, following criteria can be used to measure degree of decentralization in
an office:

1. More number of decisions made at lower levels, higher the degree of
decentralization
2. More important decisions made at lower levels, higher the degree of
decentralization
3. More the effect of decisions made at lower levels on other functions in
office, higher the degree of decentralization
4. Lesser the checking of decisions made at lower levels, higher the degree
of decentralization

4.4.2 Advantages of Centralization

The various advantages of centralization are following:

1. Centralization leads to better utilization of talents of top leaders.

2. Centralization acts as a unifying force in the office. It ensures all
departments move together and all operations are integrated.
3. Centralization ensures strong coordinated team at top level.
4. Centralization ensures that uniform plans and policies are implemented
in office.
5. Centralization is best suitable in emergencies as it helps in faster
decision-making.
6. Duplication of functions and facilities is least in centralization.

4.4.3 Disadvantages of Centralization

The various disadvantages of centralization are following:

1. Decision-making and communication flow is slow in centralized offices.

2. There are always chances of abuse of power and authority in centralized
offices by corrupt officers.
3. Centralization restricts development of subordinates and does not
prepare them for higher positions in offices.
4. It leads to low motivation and morale of employees as they do not enjoy
60 autonomy under centralization.


Organising an Office
5. Future of office depends upon decision-making capabilities of top
executives.

4.4.4 Advantages of Decentralization

The various advantages of decentralization are as follows:

1. Decentralization relieves top executives of their workload by shifting

routine decision making to lower executives.
2. Decentralization enhances job satisfaction and motivation of
subordinates by giving them autonomy and chances for participation in
decision-making.
3. Decentralization facilitates faster and accurate decisions nearest to the
point of action.
4. Decentralization helps growth and diversification of office by giving
autonomy for innovation and creativity.
5. Decentralization gives subordinates opportunities to exercise their
judgment, which leads to executive development.
6. Decentralization means wider span of control and lesser layers of
management through which communication has to travel. Thus, there are
lesser chances of distortion of communication.

4.4.5 Disadvantages of Decentralization

The various disadvantages of decentralization are as follows:

1. Decentralization increases administrative expenses due to duplication of

functions and underutilization of physical facilities.

2. Decentralization gives autonomy to different divisions or departments.

This may lead to difficulty in cooperation among various units.

3. Due to decentralization, different departments may implement policies

and programs inconsistent to each other.

4. Decentralization is not possible if office lacks competent personnel.

5. External constraints such as market uncertainties, resource constraints,

and government policies may create barriers to decentralization.

4.4.6 Factors Affecting Decentralization

The various factors affecting decentralization are as follows:

1) Size and complexity of the office: In bigger and complex offices, there
is a greater need for decentralization.

2) Physical dispersal of operations: More geographically dispersed the

physical facilities/ operations of office, greater is the need for
decentralization.
61

 
Office Organization 3) Degree of diversification in office activities: More diversified the work
and Management
in the office, more is the need for decentralization.

4) History of the office: Offices, which have grown through diversification
and amalgamations, are more likely to be decentralized.

5) Availability of competent staff: If lower-level staff in office is

competent, then it is advisable to have decentralization in office.

6) Philosophy of top management: If top management believes in

individual’s freedom and capability, offices need to be decentralized.

7) Effective planning, control and communication system: Existence of

sound planning, communication and control system in the organizations
support decentralization.

8) External environment: When external conditions are uncertain and

unfavorable, then high degree of freedom can be fatal to the office as
resources need to be optimally utilized.

4.4.7 Difference between Delegation and Decentralization

Table 4.1: Difference between Delegation and Decentralization

Delegation Decentralization
Delegation is a process. Decentralization is outcome of
delegation.
It is necessary for management. It is discretionary and depends upon
the top management.
It is a technique of management. It is both- a philosophy as well as a
technique of management.
Delegation is the relationship Decentralization is relationship
between superior and subordinate. between top management and various
departments.
Delegation is possible without Decentralization is not possible
decentralization. without Delegation.
Delegator can exercise control over Control is delegated to departmental
subordinates. heads.
Delegation supports decision- Decentralization results in diffusion
making in a superior –subordinate of decision-making authority
relationship in the office. throughout office.

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Organising an Office
4.4.8 Difference between Centralization and
Decentralization
Table 4.2: Difference between Centralization and Decentralization

Basis Centralization Decentralization

Definition Centralization is retention Decentralization is
of authority for planning dispersal of authority to
and decision –making with various levels of
the top management. management.
Involves Methodical reservation of Methodical dispersal of
authority. authority.
Flow of Vertical (Mostly Free Flow
Communication downward)
Pace of Slow Relatively fast
Decision-
Making
Benefits Proper coordination and Sharing of burden and
Leadership responsibility
Decision – Top management Multiple positions in all
making three levels of management
authority
Implemented Inadequate control over the Considerable control over
when organization the organization
Suitability Small organizations Big organizations

Centralization and decentralization are used relative to each other. Absolute

centralization or decentralization is neither practical nor feasible in any
office. Thus, managers always seek a judicious blend of both as per the need
of the office. This blending of centralization and decentralization has an
impact on organization structure of office and makes these different from
office to office.

Check Your Progress B

1. Differentiate between Centralization and Decentralization.

...................................................................................................................
...................................................................................................................
...................................................................................................................
...................................................................................................................
2. Distinguish between Delegation and Decentralization.
...................................................................................................................
...................................................................................................................
................................................................................................................... 63

 
Office Organization 3. List the factors that favor decentralization of authority in an office.
and Management
...................................................................................................................
...................................................................................................................
...................................................................................................................
...................................................................................................................
4. What criteria is used to measure degree of decentralization in an
office?
...................................................................................................................
...................................................................................................................
...................................................................................................................

4.5 LET US SUM UP

Organization is essential for any group activity. We spend majority part of
our lives in organizations. Organizing is one of the important functions of
office management. Once the managers decide the office objectives, next
logical step is to give a practical shape to the activities needed to accomplish
these objectives. In organizing, various activities required to be performed
are determined, similar activities are grouped together and then these
manageable group activities are allocated to individuals.

Different authors have defined term organization differently. Also, term

organization is used in two ways. First, it has been defined as the organizing
function of office management process and second, it has been defined as a
network of interrelationships of individuals and jobs called organization
structure. Organization structure is the result of organizing activity or
process. Organization is the tool with which office managers put plans in to
action. Office Organization process involves decisions about work
specialization, chain of command, departmentalization, span of control,
centralization and decentralization, and formalization etc.

In offices, task allocation, work division, delegation of authority, span of

control and distribution of authority can be done in several ways. Thus,
several different organization structures have evolved as the result of such
decisions. Each one of these has distinct characteristics, advantages, and
disadvantages. No one is better than the others rather suitability of a structure
is dependent on the need of the office. Four main types of office
organizations are line organization, functional organization, line and staff
organization, and committee organization.

Concept of centralization and decentralization is related to diffusion of

decision-making authority in the offices. These terms are opposite to each
other. Centralization of authority implies concentration of decision-making
at top levels of office. It refers to the concentration of powers at higher levels
64


Organising an Office
of management. On the other hand, decentralization is the diffusion of
decision-making powers to middle and lower levels of management or the
degree to which middle and lower-level employees have their say in
decision- making or actually make decisions. Giving more authority to
employees to make decisions empowers them.

4.6 KEYWORDS
Authority: Authority are rights inherent in a managerial position.
Centralization: It refers to the systematic and consistent reservation of
authority at central points within an organization.
Chain of Command: It is a continuous line of authority extending from top
to bottom of the organization.
Decentralization: It is a systematic delegation of authority at various levels
of organization.
Departmentalization: It refers to basis used for jobs grouping to make
departments.
Organizational Structure: It is a formal arrangement of jobs within an
organization.
Organizing: It is the process of arranging and structuring of organizational
work to accomplish organization’s goals.
Span of Control: Span of control pertains to the number of employees who
can be effectively and efficiently supervised by a manager.

4.7 TERMINAL QUESTIONS

1. Describe importance of good office organization.
2. What is line organization? Discuss its advantages and disadvantages.
3. Enumerate limitations of committee. How can committee be made
effective?
4. Discuss the advantages and disadvantages of line and staff organization.
5. Enumerate the features of Staff organizations. Why this organization is
not suitable for small organizations?
6. What do you understand by “Centralization”? Describe the advantages
and disadvantages of centralization in an office.
7. “Centralization and decentralization are two sides of same coin.”
Comment.
8. How is delegation different from decentralization? Discuss the factors
that necessitate decentralization in an office.
9. What do you understand by “decentralization”? How would you assess
whether an office is centralized or decentralized?
Note: These questions will help you to understand this unit better. Try to
write answers for them. But do not submit your answers to the University
for assessment. These are for your practice only.

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