Distribution of decision-making powers
| Distribution of decision-making powers |
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| See also |
The principle of deployment of tasks, powers and responsibilities is one of the elements of the construction of the organizational structure. It is an important element in the creation of the design of the structure, because it determines how the decision-making power will be distributed among the various positions in the organization. For example, when the owner has a representative, he must give to him certain powers i.e.: to decide on the dates of payment, selection of subcontractors etc. The employee does not have to every time ask for acceptance of the owner, so a business owner can devote his time to make other more important decisions.
With the principles of the distribution of decision-making powers following issues are connected:
- determine the responsibilities of managers for the work of subordinates,
- delegation of the powers and responsibilities
- designation of the degree of concentration or decentralization of decision-making powers
Application
The main importance is the principle of "balance of responsibilities, powers and responsibilities", which says that if a position in the organization has to do some task, we need to also grant him the necessary powers and to establish the responsibilities, which will balance the range of tasks and powers. The principle of responsibility assumes that the superior shall have full responsibility for the work of the subordinate.
Delegation - is a process during which the manager forward to the other employees its duties and powers.
The reasons for delegation:
- reducing the load for manager and allowing to focus his attention on other areas
- better preparation of the subordinate to solve a specific problem
- raising the qualifications of subordinates
Problems with delegation:
- some managers are not able to properly delegate permissions, they are afraid that people would harm their career, they do not have confidence in subordinates
- people are afraid that they will not be able to perform tasks and that their work will not be adequately rewarded, tend to avoid the risk and prefer that the entire responsibility was taken by boss
Just like some people can transfer their powers to others, all organizations develop the structure of powers of binding various positions and divisions. In the centralized structure, decisions are made by high-level management or even by a single person. Power is at the top of the organization. In the decentralized structure improvements are being made by larger number of people at the middle and lower management level.
Examples of Distribution of decision-making powers
- A company may decide to distribute decision-making power among the executive board. This board is composed of the CEO, a few senior executives, and other members of the board chosen by the company. The board is responsible for making important decisions such as setting the budget, approving new projects and initiatives, and approving changes in policies.
- A business may also distribute decision-making power among department heads. Each department head has the authority to make decisions related to their own department, such as setting goals and objectives, approving new initiatives and making personnel decisions.
- In a small business, the owner may choose to distribute decision-making power among their employees. Employees may be given the authority to make decisions in their own areas of expertise, allowing the owner to focus on other important aspects of the business.
- A company may also choose to distribute decision-making power among shareholders. Each shareholder has the right to vote on certain issues, such as electing a board of directors or approving a major acquisition.
Advantages of Distribution of decision-making powers
The distribution of decision-making powers can be beneficial to the organization in many ways. These advantages include:
- Increased efficiency – As decision-making power is delegated to lower levels, the speed of decision-making increases and the efficiency of the organization is improved.
- Minimized chances of errors – Through delegation of decision-making powers, the chances of errors are minimized as the decision-making is spread out among different personnel, increasing accuracy.
- Reduced stress – By delegating decision-making power, the stress of making decisions is reduced as the responsibility is shared among several individuals.
- Increased job satisfaction – When employees are given the power to make decisions and are involved in the decision-making process, their job satisfaction increases.
- Improved morale – Employees feel more valued and appreciated when they are given the opportunity to make decisions and contribute to the organization. This increases morale and motivation in the workplace.
Limitations of Distribution of decision-making powers
The principle of deployment of tasks, powers and responsibilities has some limitations. These include:
- The lack of control over employees: As decision-making authority is given to the employees, there is a risk that decisions may be taken without proper consideration of the implications.
- Unclear accountability: When different people have different levels of decision-making power, it can be difficult to determine who is ultimately responsible for a particular decision.
- Loss of consistency: As different people have different decision-making power, it can cause decisions to be inconsistent, leading to confusion in the organization.
- Overworking of employees: As employees are given decision-making power, they may be overworked and unable to keep up with their workloads.
- Increased chances of conflict: As different people have different decision-making power, it may lead to disagreements or disputes.
In addition to the principle of deployment of tasks, powers and responsibilities, there are several other approaches related to the distribution of decision-making powers within an organization. These approaches include:
- Decentralization: This involves the delegation of certain decision-making powers to lower-level management and employees, allowing them to make decisions without having to wait for approval from higher-level managers. Decentralization can help to spread out decision-making power and increase efficiency.
- Delegation: This is the practice of entrusting a task or responsibility to a subordinate. It allows a manager to focus on higher-level tasks, while subordinates can take responsibility for making decisions within their areas of expertise.
- Group Decision-Making: This involves involving multiple stakeholders in the decision-making process. It allows for a more informed decision to be made, as multiple perspectives can be taken into account when making a decision.
- Collective Decision-Making: This is the practice of involving multiple stakeholders in the decision-making process. It allows for a more informed decision to be made, as multiple perspectives can be taken into account when making a decision.
In summary, there are several approaches to the distribution of decision-making power within an organization, such as decentralization, delegation, group decision-making, and collective decision-making. Each of these approaches has its own advantages and disadvantages and can be used in different contexts to maximize efficiency and effectiveness in decision-making.
References
- Vroom, V. H., & Yetton, P. W. (1973). Leadership and decision-making (Vol. 110). University of Pittsburgh Pre.
