Keys to Management

When an organization is centralized, a limited amount of authority is delegated. If it is decentralized, a greater degree of authority is given to staff and divisions. In a decentralized company, the divisions will have wider responsibilities and authority and more important decisions can be made at lower levels. There are fewer controls from Head Office.

To sum up, a centralized busines

s has a 'tight' structure, whereas a decentralized business has a 'looser' structure.

No enterprise chooses complete centralization or decentralization. In practice, it tries to find a balance between the two forms. Fox instance, Head Office can control things like cash, capital expenditure and stock control. The divisions will have a great deal of autonomy, being responsible for designing, making and marketing.

Nowadays, decentralization is the fashion, the 'buzz' word. Believers in decentralization say that it helps to 'develop people' because staff get more responsibility, make more decisions, and so gain experience for later managerial positions. Decentralization allows top managers to delegate jobs, so these managers will have more time to work on setting goals, planning corporate strategy and working out policies. If an organization is too centralized, people become robots – which is demotivating. The strongest argument foe decentralization is that, in competitive conditions, the ‘looser’ companies will be more flexible, better able to make quick decisions and to adapt to change.

It is normal for people to like independence, to dislike control. The more educated staff is, the more they will want to make decisions, to have authority. However, it is not easy to have more decentralization if the right staff is not available. It is one thing to prescribe diversity, decentralization and differentiation, and it is another to manage it.

11. Communication

It is already known that communications in excellent companies are different from those in other companies. Excellent companies have a 'vast network of informal, open communications'. People working in them keep in contact with each other regularly and have many unscheduled meetings.

In the best-run businesses, few barriers exist to prevent people talking to each other. The companies do everything possible to ensure that staff meet easily and frequently. There are numerous examples of companies who believe in 'keeping in touch': firms like IBM, Walt Disney Productions and so on.

One problem with communication is that people think they have got their message across when in fact they have not. We do not, in fact, communicate as effectively as we think we do. This finding is important for managers. It suggests that, when giving instructions, managers must make sure that those instructions have been understood and interpreted correctly.

A breakdown in communication is quite likely to happen if there is some kind of 'social distance' between people. In organizations, people may have difficulty communicating if they are different in status, or if one person has a much higher position than the other. For this reason, staff often ‘filter' information. They deliberately alter the facts, telling the boss what he wants to hear. They do not want to give bad news, so they give their superior too good an impression of the situation, thus, the info becomes unreliable.

One way of reducing social distance - and improving communications - is to cut down on status symbols. It is possible, for example, to have a common dining-room for all staff or to wear uniforms.

Physical surroundings and physical distance limit or encourage communication. Studies show that the further away a person is, the less he/she communicates.

The physical layout of an office must be carefully planned. Open-plan offices are designed to make communication easier and quicker. However, it is interesting to note that employees in such offices will often move furniture and other objects to create mini-offices.

Another important barrier to communication is selective perception. This means that people perceive things in different ways. The world of the sender is not the same as the world of the receiver. Because their knowledge and experience is different, sender and receiver are always on slightly different wavelengths.

Communication problems will arise, from time to time, in the best-run companies. However, to minimize such problems, managers must remember one thing. Communication should, be a two-way process. Managers should encourage staff to ask questions and to react to what the managers are saying. Feedback is essential. The most useful question a manager can ask is ‘Did you understand that?’

12. Leadership

Leadership is needed at all levels in an organization. It is difficult to define leadership satisfactorily.

A typical definition is that the leader 'provides direction and influences others to achieve common goals'.

Leader has to create ‘a sense of excitement’ in the organization and convince staff that he knows where the business is going. In add., he must be a focus for their aspirations.

When psychologists and other researchers first studied leadership, they tried to find out if leaders had special personal qualities or skills. They asked the question: Were there specific traits which made leaders different from other people? The results of their research were disappointing. In time, it became clear that there was not a set of qualities distinguishing leaders from non-leaders.

However, there are some qualities which are considered important for success as a leader: sociability, self-confidence, dominance, participation in social exchange, desire to excel etc. But, it was pointed out, many people with these traits do not become leaders. And many leaders do not have such traits! It is generally agreed now that you can’t say a person is a leader because he/she possesses a special combination of traits. Although some qualities, like above-average intelligence and decisiveness, are often associated with leaders.

An important analysis of leadership has been made by Fred Fiedler, Professor of Psychology and Management. He has identified two basic leadership styles:

Task-motivated leaders tell people what to do and how to do it. Such leaders get their satisfaction from completing the task and knowing they have done it well. They run a 'tight ship', give clear orders and expect clear directives from their superiors. Their priority is getting the job done.

Relationship-motivated leaders are more people-oriented. They get their satisfaction from having a good relationship with other workers. They want to be admired and liked by their subordinates.

Throughout his work, Fred Fiedler emphasized that both styles of leadership could be effective in appropriate situations.

There are some characteristics of the chairmen and chief executives of the companies, which made them good leaders: firstly, the leaders are 'visible'. They did not hide away in some ivory tower at Head Office. Instead, they made regular visits to plants, toured round their companies and talked to employees.

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