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Organisation chart is a drawing which shows the relationship among the various posts established in the organisation.

Formal organisation.

Formal organisation.

It emerges out of mutual relations and tastes.

a. On the basis of territory 

b. On the basis of function 

c. On the basis of type of product manufactured

The process of grouping the activities of similar nature under same department is known as Departmentalisation.

Delegation of authority refers to the downward transfer of authority from a superior to a subordinate. Its main elements are authority, responsibility and accountability.

Importance of delegation-

(i) Effective Management: By delegating routine work to the subordinates the managers get more time to concentrate on important matters and excel in new areas efficiently.

(ii) Employee Development: Delegation empowers the employees by providing them the chance to use their skills, gain experience and develop themselves for higher position.

(iii) Motivation of employees: Responsibility for work builds the self-esteem of an employee and improves confidence. He/She feels encouraged and tries to improve his/her further performances.

(iv) Facilitation of growth: Trained and experienced employees are able to play significant roles in the launch of new projects by replicating the work ethos they have absorbed from existing units, in the newly set unit.

Meaning of organising: It refers to the process of defining and grouping the activities of an enterprise and establishing authority relationship among them.

Process of Organising: It includes the following steps:

i. Indentification and Division of Work: At this step total work is divided into various manageable activities so that duplication of work can be avoided.

ii. Departmentalisation: The activities of the same nature are grouped together and assigned to a particular department.

iii. Assignment of Duties: At this stage, the responsibility of each individual or post is decided.

iv. Establishing Reporting Relations: Finally, reporting relations are established so that each individual know who he has to take orders from and to whom he is accountable.

Essential Elements of Delegation of Authority, i.e., Responsibility, Authority and Accountability are as follows:

i. Responsibility: Responsibility is the obligation of a subordinate to properly perform the assigned duty. When a superior assigns a job to his subordinate, it becomes the responsibility of the subordinate to complete that job. This means that the word responsibility comes into play only after the job has been assigned. Thus, to assign job can be called to assign responsibility Features:

a. Responsibility can be assigned to some other person.

b. The essence of responsibility is to be dutiful.

ii. Authority: Authority means the power to take decisions. Decision can be related to the use of resources, and to do or not to do something.

Features:

a. Authority can be assigned (delegated) to some other person.

b. It is related to the post (with the change of post, even authorities change).

iii. Accountability: Accountability means the answerability of the subordinate to his superior for his work performance.

Features:

a. Accountability cannot be delegated to some other person.

b. It is only towards the delegators.

Neha should decide for divisional structure because 

(i) She will diversify her unit now into varied product lines. 

(ii) Such a structure would enable her to know the profit margins from each product line and accordingly, she can plan and select the specific product for future diversification. 

(iii) It will facilitate further expansion without disturbing the existing units.

Delegation of authority refers to the downward transfer of authority from a superior to a subordinate. Its main elements are authority, responsibility and accountability.

Importance of delegation-

(i) Effective Management: By delegating routine work to the subordinates the managers get more time to concentrate on important matters and excel in new areas efficiently.

(ii) Employee Development: Delegation empowers the employees by providing them the chance to use their skills, gain experience and develop themselves for higher position.

(iii) Motivation of employees: Responsibility for work builds the self-esteem of an employee and improves confidence. He/She feels encouraged and tries to improve his/her further performances.

(iv) Facilitation of growth: Trained and experienced employees are able to play significant roles in the launch of new projects by replicating the work ethos they have absorbed from existing units, in the newly set unit.

(v) Basis of management hierarchy: Delegation of authority establishes superior-subordinate relationships, which are the basis of managerial hierarchy.

(vi) Better co-ordination: Clarity in powers, duties and answerability helps in developing and maintaining effective co-ordination amongst the departments, levels and functions of management.

Delegation of authority refers to the downward transfer of authority from a superior to a subordinate. Its main elements are authority, responsibility and accountability.

Importance of delegation-

(i) Effective Management: By delegating routine work to the subordinates the managers get more time to concentrate on important matters and excel in new areas efficiently.

(ii) Employee Development: Delegation empowers the employees by providing them the chance to use their skills, gain experience and develop themselves for higher position.

(iii) Motivation of employees: Responsibility for work builds the self-esteem of an employee and improves confidence. He/She feels encouraged and tries to improve his/her further performances.

(iv) Facilitation of growth: Trained and experienced employees are able to play significant roles in the launch of new projects by replicating the work ethos they have absorbed from existing units, in the newly set unit.

(v) Basis of management hierarchy: Delegation of authority establishes superior-subordinate relationships, which are the basis of managerial hierarchy.

(vi) Better co-ordination: Clarity in powers, duties and answerability helps in developing and maintaining effective co-ordination amongst the departments, levels and functions of management.

Delegation of authority refers to the downward transfer of authority from a superior to a subordinate. Its main elements are authority, responsibility and accountability.

Importance of delegation-

(i) Effective Management: By delegating routine work to the subordinates the managers get more time to concentrate on important matters and excel in new areas efficiently.

(ii) Employee Development: Delegation empowers the employees by providing them the chance to use their skills, gain experience and develop themselves for higher position.

(iii) Motivation of employees: Responsibility for work builds the self-esteem of an employee and improves confidence. He/She feels encouraged and tries to improve his/her further performances.

(iv) Facilitation of growth: Trained and experienced employees are able to play significant roles in the launch of new projects by replicating the work ethos they have absorbed from existing units, in the newly set unit.

(v) Basis of management hierarchy: Delegation of authority establishes superior-subordinate relationships, which are the basis of managerial hierarchy.

(vi) Better co-ordination: Clarity in powers, duties and answerability helps in developing and maintaining effective co-ordination amongst the departments, levels and functions of management.

Correct option is a. Both Assertion (A) and reason (R) are true

Importance of Delegation of Authority: The importance of delegation of authority is clarified through the following facts:

i. Effective Management: Effectiveness means successful accomplishment of an objective. Delegation of authority reduces the workload of a manager. Managers who practise delegation of authority are definitely better decision makers than those managers who do not delegate authority. The former ones get the benefit of the skills of their subordinates. This situation eases the attainment of objectives. As a result, the effectiveness of managers is improved.

ii. Employee Development: The mental growth of a person takes place only when he has authority to take decisions. The process of delegation of authority provides the authority to take decisions by the subordinates. With the given authority, managers take decisions contingent to the situations. As a result, in future they become more able to take extra responsibility.

iii. Motivation of Employees: In the process of delegation of authority, both authority and responsibility are delegated to the subordinates. This situation provides liberty to work and take decisions on the part of subordinates. Gaining through this, they exhibit their talent and skill. With better performance the subordinates create a niche for themselves in the organisation. Consequently, they get job satisfaction and feel motivated to perform even better.

iv. Facilitation of Growth: Delegation of authority does not develop only one person or division but facilitates the development of the organisation as a whole. As adequate number of able employees are available in an organisation to take decisions expansion, modernisation and diversification of a business can be done with full confidence.

v. Basis of Management Hierarchy: Management hierarchy is inevitable to run a business organisation successfully. Only because of this hierarchy, the superiors and subordinates come in contact with one another and get an opportunity to understand one another. This hierarchy is established through the process of delegation of authority. Under this, authority flows from top level to the bottom level. As a result, senior and subordinate links are established from top to bottom.

The three elements of Delegation of Authority, i.e., Responsibility, Authority and Accountability are as follows:

i. Responsibility: Responsibility is the obligation of a subordinate to properly perform the assigned duty. When a superior assigns a job to his subordinate, it becomes the responsibility of the subordinate to complete that job. This means that the word responsibility comes into play only after the job has been assigned. Thus, to assign job can be called to assign responsibility.

Features:

a. Responsibility can be assigned to some other person.

b. The essence of responsibility is to be dutiful.

ii. Authority: Authority means the power to take decisions. Decision can be related to the use of resources, and to do or not to do something.

Features:

a. Authority can be assigned (delegated) to some other person.

b. It is related to the post (with the change of post, even authorities change).

iii. Accountability: Accountability means the answerability of the subordinate to his superior for his work performance.

Features:

a. Accountability cannot be delegated to some other person.

b. It is only towards the delegators.

Importance of Delegation: The following are the main points of the importance of delegation:

i. Effective Management: Delegation leads to effective management through empowerment of employees.

ii. Employee Development: Delegation helps in employee development by providing them with the chance to use their skills and experience.

iii. Motivation of Employees: Delegation motivates employees by giving them responsibility which builds their self-esteem.

Formal organisation

Important of decentralisation is explained as follows:

(i) Relief to top management: In a decentralized organisation, top managers are not burdened by common day-to-day problems. They have enough time to plan ahead and develop new strategies.

(ii) Develops managerial talent for the future: In a decentralized organisation, even lower level managers learn the art of exercising decision making authority. This prepares them for the promotion to the higher levels.

(iii) Quick decision making: In a decentralized organisation, decision making is not restricted in few hands only but decision power is entrusted with all the managers who perform the activities.

(iv) Develops initiative amongst subordinates: Decentralization helps to promote self-reliance and confidence amongst the subordinates. They learn to depend on their own judgement.

(v) Facilitates growth: Decentralization provides greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department. Consequently the productivity levels increase and the organisation is able to generate more returns which can be used for growth and expansion purposes.

(vi) Better control: Decentralization makes it possible to evaluate performance at each level. The departments can be individually held accountable for their results.

Correct option is a. Both Assertion (A) and reason (R) are true.

Important of decentralisation is explained as follows:

(i) Relief to top management: In a decentralized organisation, top managers are not burdened by common day-to-day problems. They have enough time to plan ahead and develop new strategies.

(ii) Develops managerial talent for the future: In a decentralized organisation, even lower level managers learn the art of exercising decision making authority. This prepares them for the promotion to the higher levels.

(iii) Quick decision making: In a decentralized organisation, decision making is not restricted in few hands only but decision power is entrusted with all the managers who perform the activities.

(iv) Develops initiative amongst subordinates: Decentralization helps to promote self-reliance and confidence amongst the subordinates. They learn to depend on their own judgement.

(v) Facilitates growth: Decentralization provides greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department. Consequently the productivity levels increase and the organisation is able to generate more returns which can be used for growth and expansion purposes.

(vi) Better control: Decentralization makes it possible to evaluate performance at each level. The departments can be individually held accountable for their results.

Delegation of authority refers to the downward transfer of authority from a superior to a subordinate. Its main elements are authority, responsibility and accountability.

Importance of delegation-

(i) Effective Management: By delegating routine work to the subordinates the managers get more time to concentrate on important matters and excel in new areas efficiently.

(ii) Employee Development: Delegation empowers the employees by providing them the chance to use their skills, gain experience and develop themselves for higher position.

(iii) Motivation of employees: Responsibility for work builds the self-esteem of an employee and improves confidence. He/She feels encouraged and tries to improve his/her further performances.

Following are the main points which highlight the importance of decentralisation:

i. Develops Initiative among Subordinates: Under decentralisation, authorities are delegated in large amount. Authority is a kind of power which compels a person to think/contemplate or to do something new. This inculcates in him the ability to take initiative. Decentralisation not only gives authority but also makes it possible to convert great ideas into valuable creative work.

ii. Develops Managerial Talent for Future: Under decentralisation, decision making authority is given even to the lower level managers. In this way, by getting opportunities to take decisions, knowledge and experience of all levels of managers increases. This develops talent in the managers to bear extra responsibility in the future.

iii. Quick Decision Making: The burden of all managerial decisions is no more confined to some limited people but is distributed among many people. This not only leads to quick decision making but also results in better decision making. All the people are well aware of the problems faced by their unit or division and for this reason they are capable of taking the best possible and quick decisions.

Important of decentralisation is explained as follows:

(i) Relief to top management: In a decentralized organisation, top managers are not burdened by common day-to-day problems. They have enough time to plan ahead and develop new strategies.

(ii) Develops managerial talent for the future: In a decentralized organisation even lower level managers learn the art of exercising decision making authority. This prepares them for the promotion to the higher levels.

(iii) Quick decision making: In a decentralized organisation, decision making is not restricted in few hands only but decision power is entrusted with all the managers who perform the activities.

(iv) Develops initiative amongst subordinates: Decentralization helps to promote self-reliance and confidence amongst the subordinates. They learn to depend on their own judgement.

(v) Facilitates growth: Decentralization provides greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department. Consequently the productivity levels increase and the organisation is able to generate more returns which can be used for growth and expansion purposes.

(vi) Better control: Decentralization makes it possible to evaluate performance at each level. The departments can be individually held accountable for their results.