DELEGATION AND DECENTRALISATION OF AUTHORITY

1.0 INTRODUCTION

In this unit, you will be introduced to delegation of responsibilities and decentralisation of authority. You will learn about the key principles of delegation, why executives find it difficult to delegate; and overcoming barriers to delegation. You will also learn about task specialisation, span of control, factors that affect span of management as well as Graicunas theory.

2.0 OBJECTIVES

At the end of this unit, you should be able to:

1. define delegation and decentralisation 
2.  discuss the key principles of delegation 
3.  explain the reasons why people fail to delegate and how to combat the barriers to delegation 
4.  highlight the factors that affect span of management 
5. describe Graicunas empirical research findings on decentralisation. 

3.0 MAIN CONTENT

3.1 Delegation

Delegation is the organisational process that permits the transfer of authority from a superior to a subordinate. Delegation of authority empowers a subordinate to make commitments, use resources and take action in relation to duties assigned to him. No organisation can function effectively without delegation. The division of an organisation into units (departmentalisation) involves delegation. Delegation originates from the fact that one person alone cannot successfully discharge all the responsibilities in an organisation. In essence, delegation of authority means that “a subordinate has the power to make decisions and to act within explicit limits without checking with superiors”.
Delegated authority enables the superior to share responsibility with his subordinate. When one delegates, three major factors are implicit:

1. there is assignment of responsibility 
2. there is a delegation of authority 
3.  there is a creation of accountability. 

Delegation involves accountability. Accountability means answering for the use of your formal authority by someone else. Delegation of formal authority to another person does not relieve one of the necessities of accounting for it. A subordinate must account for the use of delegated authority because an obligation is created. A subordinate is held responsible for assigned tasks and he is accountable for the satisfactory completion of the duty.

3.1.1 Key Principles of Delegation

a. Parity of authority and responsibility

One of the problems often associated with delegated authority is that 'people like to delegate responsibility but not authority. One of the major principles of delegation states that for effective delegation, authority granted to a subordinate must be equal to the responsibility assigned to him.

It is to be expected that when responsibility is given to a subordinate, he is to have commensurate authority to discharge it. Failure to equate responsibility with authority leads to inefficiency. In Nigeria, subordinates often complain of having no appropriate authority to discharge assigned duties. Lack of authority denies the subordinate position-based influence to gain the necessary co-operation from others.

In some instances, the subordinate does not understand the limit of his authority. A production manager cannot force an obsolete equipment to be as effective as a new machine, and a sales manager cannot force customers to buy. These are limitations imposed by circumstances. Parity of authority and responsibility is not, however, a panacea for the achievement of assigned duties.

b. Absoluteness of accountability

This principle states that "although responsibility may be assigned and authority may be delegated to subordinates accountability to one's superior can neither be assigned nor delegated." When one delegates one's assigned responsibility to someone else, one is still fully accountable to one's superior for its execution. When the managing director delegates to the production manager, for instance, the production manager delegates to his plant supervisor; if the production quota is not met, the managing director's accountability to his superior cannot be delegated or assigned. It is as a result of this that if the organisation is not being productive, the managing director is replaced while the lower executives keep their position. This principle prevents the executive from "passing the buck." In order to delegate properly, one has to retain a reservoir of authority to ensure that the task is properly carried out. Accountability to one's superior is absolute and not transferable.

c. Principles of unity of command

This principle states that "a subordinate should be accountable to one superior at a time”. It is important for the subordinate to report to only one superior in order to maintain the chain of command. The essence of unity of command is to avoid conflicting instructions. It is essential in all organisations for an employee to receive delegated authority from one boss and is accountable to the same boss for the assigned task.

The principle of unity of command is sometimes violated where functional authority exists. The subordinate receives instruction from his line superior and also from his staff executive. This could happen without any major consequence if the authority of the staff executive is clearly defined. The principle could is also be violated each time one bye-passes a level of intermediate supervision. A managing director who for instance, usually ignores the sales manager and speaks directly to the salesmen is violating the unity of command principle.

3.1.2 Failure to Delegate

Despite the fact that delegation is a very important organisational process, some executives find it difficult to delegate. Some of the major reasons are summarised below.

1.  Some executives get trapped in the "I can do it better myself fallacy”. 
2.  Lack of ability to direct or encourage co-operation among subordinates. 
3.  Fear that delegation diminishes managerial authority. 
4.  Absence of selective controls to warn of impending difficulties. (5) Lack of confidence in subordinates. 
5.  A temperamental aversion to taking a chance. 

A supervisor who refuses to delegate frustrates his subordinates as he denies them the intrinsic and extrinsic satisfaction derived from accomplishing a task. Delegation helps in training employees to assume responsibility and learn to be accountable for assigned tasks. Failure to delegate makes the executive indispensable in an organisation and should he resign, die or is dismissed, a vacuum is created. Delegation does not relieve managers of their original responsibility. They could withdraw delegated authority at any time

3.1.4 Combating Barriers to Delegation

To overcome the barriers to delegation, the following guidelines are suggested.

1. Realise that subordinates have much to contribute to decision- making in their areas of specialisation.
2.  Learn to plan ahead so that delegation can take place before, rather than, after the act. 
3. Build confidence in employees through training, recognition, and counseling. 
4.  Develop control systems that will point out impending problems. 
5. Be willing to take a chance on subordinates. 
6.  Force subordinates to make decisions while giving them help when needed. 
7. Do not be overly critical when subordinates make mistakes. 
8.  Let subordinates know what is to be done and the results that are expected. 
9.  Supply subordinates with adequate resources to fulfill their responsibilities. 

3.2 Decentralisation

An organisation is said to be decentralised if authority to make decisions is delegated to managers at the lower ladders of the organisational hierarchy. What really constitutes decentralisation is relative. In contrast to a centralised organisation; top management is either fully centralised or fully decentralised. Certain decisions are often centralised and others are decentralised. As a general rule, factors such as the size of the organisation, the degree of interaction between members, management philosophy and the personality of the members determine the degree of decentralisation.

Decentralisation is encouraged in all modern organisations because it promotes initiative and flexibility and helps in the development of subordinates by helping them to participate in decision-making. Centralisation, on the other hand, promotes directional control, coordination, specialisation, standardisation, economies of scale and the use of various cost saving devices.

It is impossible to look at an organisation chart and determine whether an organisation is centralised or decentralised; It is the practice that determines that. One of the major criticisms often brought against the Nigerian civil service is that it is over centralised thus denying middle management of initiative and independent thought. It is not unusual for letters originating even from key personnel in the organisation to start with "I am directed"; the civil service develops "administrators" instead of managers. Large business enterprises have a greater tendency to be decentralised than small enterprises. Companies with different product lines and services decentralise their operations to encourage profit centres – a practice which is often referred to as profit decentralisation. A company like the UAC - with very many divisions and subsidiaries is an example of a company with decentralised product division – with each manager responsible for profits in his own division.

Decentralisation of operations to small units facilitates decision-making and brings the decision-making authority very close to the point of operation. In a sales operation, credits of it very reasonable sum of money could be approved on the spot without referring to the headquarters. It gives the divisional managers the opportunity to tailor their decisions to suit the local environment in which they serve.

As a general rule, decisions that affect only one department such as sales can be decentralised as it involves the customer, the salesman and the area manager. Decisions that will affect more than one department located in different geographical areas are best centralised for easier coordination. A decision involving promising delivery dates to key customers on contractual obligation would involve production, sales, supplies and finance departments and is best handled at the top level to avoid costly mistakes that may involve millions of naira and loss of goodwill.

There is no single criterion to use in deciding whether to be fully centralised or completely decentralised. Each situation is to be evaluated on its own merit. As a guide, research findings show that the following factors must be considered before decentralisation is undertaken.

1.  Where there is a need for speed and flexibility in decision- making, decentralisation is necessary. 
2. When divisional or area managers require initiative or creativity in order to achieve profit quotas, decentralisation is necessary. 
3.  In companies with differentiated product lines, that are independent of one another and are capable of becoming profit centres, decentralisation could be instituted. 
4. Where there is ample supply of capable managers with knowledge, experience and dedication, decentralisation is recommended to motivate them. Middle managers are the most frustrated in centralised organisations as achievement is not easily recognised and there is the paucity of opportunity for advancement or even of intrinsic or extrinsic reward. 

3.2.1 Specialisation of Task

One of the major factors that promote decentralisation is task specialisation. Each department deals with a defined group of organisational activity. It is believed that the specialisation of activities will lead to increased production. This, in turn, will give rise to the design of specialised equipment, labour and facilities. It has even been carried further to include specialisation in other levels of an industrial economy such as geographical specialisation, specialisation by process and work specialisation.

It has many salutary effects in our economic life which include the following.

1. It makes training of employees easy as it takes less time to train an employee on a specific task.
2. It is easier to replace an employee who must leave the organisation or be transferred since the-employee executes a small task requiring a small skill. 
3. Since the task discharged by an employee is small, his total compensation is relatively small too. 
4. Due to the skill, and the limited time for training, no, single employee is considered indispensable in the organisation. 
5.  Specialisation promotes delegation and supervision with predictable results. 

3.2.2 Span of Control

Span of control deals with the number of subordinates that an executive can manage effectively. There is a positive relationship between span of control and delegation. A broad span of control forces manager's to allow their subordinates to enjoy the full benefits of the delegated responsibility. There is also a close relationship between the number of employees answerable to an executive and the number of management levels. It is as a result of this that Graicunas believes that all organisational structures improve management supervisory efficiency because they entail a narrow span. Narrow span of management has been advocated by most of the classical management writers. Fayol, in support of narrow span of management states that:



Whatever his rank, a man has only to command a very small number of direct subordinates, usually-less than 6, except that a foreman, who is dealing with quite a simple operation, is in direct command of 20 or 30 men.

In support of this statement, L. Urwick states that:

No superior can supervise directly the work of more than five, or at the most, six subordinates whose work interlocks.

Despite all these, it appears that the number of people a person can effectively manage cannot be determined by an arithmetical precision. It requires common sense approach that takes many variables into consideration.

3.2.3 Factors that Affect Span of Management

There are many factors that determine the span of management. These factors are discussed below.

1.  Ability of the supervisor - Individuals differ in their ability to execute tasks successfully. Some supervisors are capable of controlling more subordinates than others even if their work “interlocks". Generally, in designing the organisation, it is the ability of the average supervisor that will be used to determine the span of control. 
2. Ability of the employees - Employees with adequate skill, experience and training require little or no supervision in the discharge of their regular functions. A supervisor in charge of these professionals can supervise a large number of employees. 
3.  Type of work - The type of work employees are doing will influence the span of control. For employees working in an assembly line, there will be limited supervision compared to \when they are working individually in a service oriented task. 
4.  Geographical location - It is easier to supervise people working together than people scattered all over a large geographical region. A sales executive can supervise more salesmen all in Lagos than if the same number of Salesmen is located in the nineteen states of Nigeria.