ENGINEERING ECONOMICS AND MANAGEMENT

UNIT 4

Department of CSE, GIT

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT
SPAN OF MANAGEMENT

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

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 The Span of Management refers to the number of
subordinates who can be managed efficiently by a
superior. Simply, the manager having the group of
subordinates who report him directly is called as the
span of management.

The Span of Management has two implications:

 Influences the complexities of the individual manager’s
job
 Determine the shape or configuration of the Organization
SPAN OF MANAGEMENT

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 The span of management is related to the horizontal
levels of the organization structure.
 There is a wide and a narrow span of management.

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 With the wider span, there will be less hierarchical
levels, and thus, the organizational structure would be
flatter.
 Whereas, with the narrow span, the hierarchical levels
increases, hence the organizational structure would be
tall.
SPAN OF MANAGEMENT

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

Department of CSE, GIT
Both these organizational structures have their advantages and the disadvantages.
But however the tall organizational structure imposes more challenges
NARROW SPAN OF MANAGEMENT

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 Since the span is narrow, which means less number of
subordinates under one superior, requires more managers
to be employed in the organization. Thus, it would be very
expensive in terms of the salaries to be paid to each

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senior.
 With more levels in the hierarchy, the communication
suffers drastically. It takes a lot of time to reach the
appropriate points, and hence the actions get delayed.
 Lack of coordination and control because the operating
staff is far away from the top management.
NARROW SPAN OF MANAGEMENT

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 The major advantage of using this structure is that the
cross communication gets facilitated,
i.e., operative staff communicating with the top
management. Also, the chance of promotion increases

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with the availability of several job positions.
WIDE SPAN OF MANAGEMENT

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 In the case of a flatter organizational structure, where the
span is wide leads to a more complex supervisory
relationship between the manager and the subordinate.
It will be very difficult for a superior to manage a large

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
number of subordinates at a time and also may not listen
to all efficiently.
 However, the benefit of using the wider span of
management is that the number of managers gets reduced
in the hierarchy, and thus, the expense in terms of
remuneration is saved.
 Also, the subordinates feel relaxed and develop their
independent spirits in a free work environment, where the
strict supervision is absent.
DELEGATION OF AUTHORITY

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

The Delegation of Authority is an organizational process
wherein, the manager divides his work among the
subordinates and give them the responsibility to
accomplish the respective tasks. Along with the

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responsibility, he also shares the authority,
i.e. the power to take decisions with the subordinates,
such that responsibilities can be completed efficiently
DELEGATION OF AUTHORITY

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 In other words, a delegation of authority involves the sharing
of authority downwards to the subordinates and checking
their efficiency by making them accountable for their doings.
 In an organization, the manager has several responsibilities

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and work to do.
 So, in order to reduce his burden, certain responsibility and
authority are delegated to the lower level,
i.e. to the subordinates, to get the work done on the
manager’s behalf.
 Under the delegation of authority, the manager does not
surrender his authority completely, but only shares certain
responsibility with the subordinate and delegates that much
authority which is necessary to complete that responsibility.
 Department of CSE, GIT
19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT
DELEGATION OF AUTHORITY
FEATURES OF DELEGATION OF AUTHORITY

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 Delegation means giving power to the subordinate to act
independently but within the limits prescribed by the superior. Also,
he must comply with the provisions of the organizational policy,
rules, and regulations.

Department of CSE, GIT

 Delegation does not mean that manager give up his authority, but
certainly he shares some authority with the subordinate essential to
complete the responsibility entrusted to him.
 Authority once delegated can be further expanded, or withdrawn by
the superior depending on the situation.
 The manager cannot delegate the authority which he himself does not
possess. Also, he can not delegate his full authority to a subordinate.
 The delegation of authority may be oral or written, and may be
specific or general.
 The delegation is an art and must comply with all the fundamental
rules of an organization.
 Department of CSE, GIT
19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT
PROCESS OF DELEGATION OF AUTHORITY
 19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT
Assignment of Duties to Subordinates: Before the actual
delegation of authority, the delegator must decide on the
duties which he wants the subordinate or the group of
subordinates to perform. Here, the manager lists the

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activities to be performed along with the targets to be
achieved, and the same is spelled out to the subordinates.
Thus, in the first stage, the duties are assigned to the
subordinates as per their job roles.
 19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT
Transfer of Authority to perform the duty: At this stage,
an adequate authority is delegated to the subordinate
which is essential to perform the duty assigned to him. A
manager must make sure; that authority is strictly

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delegated just to perform the responsibility, as more
authority may lead to its misuse by the subordinate.
 19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT
Acceptance of the Assignment: At this stage, the
subordinate either accepts or rejects the tasks assigned to
him by his superior. If the subordinate or the delegate,
refuses to accept the duty and the authority to perform it,

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then the manager looks for the other person who is
capable of and is willing to undertake the assignment.
Once the assignment gets accepted by the subordinate, the
delegation process reaches its last stage.
 19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT
Accountability: The process of delegation of authority ends
at the creation of an obligation on the part of the
subordinate to perform his responsibility within the
powers assigned to him. Once the assignment is accepted

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by the subordinate, then he becomes responsible for the
completion of the duty and is accountable to the superior
for his performance.
Thus, the process of delegation of authority begins with the
duties assigned to the subordinates and ends when the
subordinate is obliged to carry out the operations as
intended.
WHAT IS POWER ??

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

Power is a personal trait that affects people at every social
level of their lives. Power can be gained through
experience and lost through mistakes and bad behavior,
but people tend to continue becoming more powerful and

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influential the longer they work and live. Power is not
hierarchical, and can flow in any direction of a
relationship.
WHAT IS AUTHORITY?

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

Authority is a formal title or position that gives someone the
tools to influence other people within their organization. A
person in authority is often powerful, but power is not
necessary for authority. Authority is important for many

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hierarchical systems and organizations to operate
smoothly and quickly.
DIFFERENCES BETWEEN POWER AND AUTHORITY
 Power is defined as the ability or potential of an individual to

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

influence others and control their actions. Authority is the legal and
formal right to give orders and commands, and take decisions.
 Power is a personal trait, i.e. an acquired ability, whereas authority
is a formal right, that vest in the hands of high officials or
management personnel.

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 The major source of power is knowledge and expertise. On the
other hand, position and office determine the authority of a person.
 Power flows in any direction, i.e. it can be upward, downward,
crosswise or diagonal, lateral. As opposed to authority, that flows
only in one direction, i.e. downward (from superior to
subordinate).
 The power lies in person, in essence, a person acquires it, but
authority lies in the designation, i.e. whoever get the designation,
get the authority attached to it.
 Authority is legitimate whereas the power is not.
DEFINITION OF LINE ORGANIZATION

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 Line organization, as the name suggests, is an
organization wherein a direct vertical relationship
between the superior and subordinate exists.
 It relies on the scalar principle, which encompasses that

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authority flows downward, i.e. the person at the top,
delegates authority to the person at the middle, who in
turn delegates the authority to the bottom level.
LINE ORGANISATION

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

Department of CSE, GIT
When it comes to the quantum of authority, it is highest at the foremost
level, which tends to decrease at each following level.
LINE ORGANISATION

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 This type of organization is characterized by a direct chain
of command, which is like a thread that passes through all
the members of the organization.
 So, who is responsible for what and who is accountable to

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whom is defined, that is to say, subordinates work under
the supervision of the superior.
DEFINITION OF LINE AND STAFF ORGANIZATION

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 Line and staff organization is the organization that
combines the merits of line and functional organization,
by adding the functional specialist to the line organization.
 Here, line authority stays same, as in the case of line

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organization and it flows downward.
 The functional experts, give advise to the front line
managers, in the matters relevant to the object of the
organization.
 The specialist works as staff and serves the line officials,
by supporting and guiding them, whenever necessary.
 Department of CSE, GIT
19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT
LINE AND STAFF ORGANIZATION
LINE AND STAFF ORGANIZATION

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 There are a number of benefits of line and staff
organization, in the sense that it gives relief to the line
managers and they can concentrate on the implementation
of policies and plans.

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 Moreover, there is a benefit of specialization, as in work is
divided between the line and staff executives, and they
focus on their respective area.
 In this type of organization, the decision making is quick
and easy, as the expert advice can help in making better
decisions.
 KEY DIFFERENCES BETWEEN LINE AND LINE & STAFF
ORGANIZATION

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 Line organization can be understood as a vertical organization, wherein the
superior can give orders to a subordinate, through a direct chain of command.
Line and staff organization is the organization structure, in which there is a
normal departmentation of the regular business operations, and there is the

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functional specialist to perform specialised activities.
 While line authority relies on command, line and staff authority is based on
command and advise.
 As we talk about discipline, line organization, is strict, whereas line and staff
organization is loose.
 In a line organization, the line executives are the generalist, who is directly
responsible for accomplishing the objectives of the organization.
 On the other hand, in line and staff organization, the staff executives are
specialist who supports and advice the line managers in the accomplishment
of organization’s objectives.
KEY DIFFERENCES BETWEEN LINE AND LINE
& STAFF ORGANIZATION

19EHS302 ENGINEERING ECONOMICS AND MANAGEMENT

 There is centralization of authority in a line organization,
and so all the decisions of the organization are taken by
the top authority only. Conversely, in line and staff
organization, there is a combination of centralisation and

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decentralisation, in essence, some of the decisions are
centrally taken while some are diffused.
 Line organization, is good for small corporations, as, in
such a structure, the authority is concentrated at the top,
which makes it difficult to manage if the number of
employees are large. On the contrary, Line and staff
organization, is best suited for large corporations due to
the presence of staff specialist, who use their knowledge
to advice line managers on complex issues.