Classical
Problem Area

Approaches to Classical Problem

Classical

Human Relations

Systems

1.   Grouping into sections and higher administrative units.

Factors considered relevant to grouping:

(a)   Workload.
Keep work load on supervisor or manager to within physical capacities. A company would only need one manager if there was no limit to the work load he could bear. Factors relevant to work load on supervisor:

i.    Extent to which guidance must be given to subordinates.

ii.   Extent to which subordinates are trained.

iii.  Extent to which subordinates are co-operative.

(a)   Avoid over-specialization of sections as this leads to sectionalism.

(b)   Choose supervisors who are employee-centered and who allow subordinates to participate in decision-making.

(c)   Let team members select each other.

(d)   Give formal recognition to work group—allow them to participate in decisions that affect them.

(e)   Use an overlapping work group structure to achieve co-operation.

(f)   Choose ‘flat'as opposed to pyramid structure.

i.    More authority pushed downwards.

ii.   Superior/subordinate relationship less formal.

Concerned with grouping to achieve co-ordination.

(a)   The more opportunity (channel capacity) for communicating, the more interdependence between administrative units can be tolerated.

(b)   The more the pattern of interdependence between units is stable, then the more'the toleration of interdependence since co-ordination can be achieved by long-term planning rather than by feedback.

iv.  Extent to which control information available.

v.   Extent to which ‘policy’ laid down so that subordinates can make decisions for themselves.

(b)   Economies of scale:

vi.   Extent of work other than supervision.

i.   Technical.

ii.  Managerial.

iii. Financial.

iv. Marketing.

v.  Risk Spreading.

Economies under the above heading may be reaped by grouping like activities together.

(c)   Where speed is paramount, then grouping should be carried out to minimize the communications burden.

(d)   Where co-ordination needs compete, attention paid to:

i.    Amount of communication between units, i.e. frequency of interaction for decision-making.

ii.   Stability of relationship between units.

iii.  Nature of decisions shared between units.

iv.  Desirability of speed in decision-making.

(c)   Co-ordination.

The greater the degree of co-ordination, the more individual efforts are integrated during performance instead of reconciled afterwards. A grouping that minimizes the co-ordination problem achieves the highest degree of self-containment in each administrative unit of the company. Absence of co-ordination leads to:

i.    Lack of consistency in goals.

ii.   Wrong timing.

iii. Inadequate action.

(e)  General approach— list main decision areas and determine information needs. Activities grouped to minimise communication.

iv.  Excess costs in achieving co-ordination.

Unity of direction principle—activities coming nearest to serving common goals grouped together (principle is vague and ambiguous).

(d)   Nature of activity.

This can influence the level of grouping, e.g. ‘Keyness’ of activity, co-ordinating nature of activity.

Above factors (a) to (d) are often in conflict. There is a need to reconcile them. Companies tend to organize their major groupings on a functional basis to achieve co-ordination of functions company-wide and to reap economies of scale, but this makes co-ordination of functions within a department difficult.

2.   Delegating authority.

Definition: Formal Authority=institutionalized right to make decisions and give orders. The broad grouping of activities into sections, depts., etc., merely defines lower limit to amount of authority that can be delegated. Some decisions may be taken remote from point of execution:

i.    To co-ordinate function company-wide.

ii.   To co-ordinate interdepartmental activities.

iii.  To reap economies of scale.

iv.  Because decision may be key.

Several principles quoted:

i.     Delegate authority to position where best information available.

ii.    Authority to take action should be delegated as close to point of action as possible.

iii.   Define job objectives then deduce what authority should be delegated.

Above principles too crude to act as guide lines. There is a need to consider:

i.     Cost of decision-making at various alternative positions.

(a)   ‘Actual’ authority depends on extent to which orders unquestioningly obeyed. Actual authority:

i.    Stems from recipient of orders and not the order-giver.

ii.   Need not only be exercised in a downward direction.

iii.  Delegation of nominal rights to give orders may not mean the delegation of real authority. Question is what authority will be accepted by those on whom authority is to be exercised.

(a)   If the information source and the point of action are fixed, then communications burden can only be reduced by varying the point at which decision-made.

(b)   Simplify decision-making to facilitate delegation.

(c)   Communications improved and speed in decision-making increased if decisions made at position where communications burden minimized.

ii.    Decreased cost or increased effectiveness resulting from economies of scale and/or improved co-ordination.

Further principle: Authority should be commensurate with responsibility.

(b)   Use influence rather than formal authority in dealing with people. Formal authority should be used merely to maintain permissive atmosphere.

(c)   Give some authority to work groups.

3.   Specifying responsibility or accountability for performance.

Definition: Responsibility=obligation to carry out certain activities with accountability for performance.

(a)   Clear assignment—authority and responsibilities should be formally scheduled.

(b)   Inherent in authority delegation is obligation to set standards against which to judge performance. Vagueness in assigning responsibility leads to confusion and jurisdictional conflict as it is not possible to hold people responsible for non-performance.

(a)   Individual assessment can be overdone. It can make for interpersonal competition at the expense of co-operation.

(b)   Too heavy an emphasis on individual assessment of performance may lead managers to neglect the development of well-knit work groups.

(c)   Standards may have to be set on several factors if increased effort on one factor leads to decreased effort on another. If a multi-factor standard does exist, there is the problem of weighting the factors according to their relative importance.

In allocating decision-making authority, attention should be paid to information and communication requirements and to the subtlety of the decision-making process— information source may limit discretionary authority:

i.     May direct aims and means.

ii.    May direct aims only.

iii.   May be advisory.

(d)   The more complex the organization, the more interdependence increases and job performance depends on how well a number of people have co-operated. In such circumstances, it is pointless to judge a person as if he were independent.

(e)   Get work groups committed to overall company goals. They will then set themselves high standards in conjunction with supervision and do their own policing. Group pressure thus used to reinforce individual commitment.

4.   Establishing relationships among employees.

In order to achieve co-ordination, people within a company should be formally related to each other so that each knows his position in the team.

Relationships between two people:

(a)   Line relationship
Below Managing Director, each person should be made accountable to someone. This line relationship:

i.    Acts as communication channel from top to bottom and so is prerequisite to co-ordination.

ii.   Acts as chain of accountability.

iii.   Pinpoints co-ordination responsibility. Note: Unity of command principle and principle of one supreme co-ordinator.

(b)   Functional relationship.

‘A’ may not have full authority to act in all matters concerning the unit under him. ‘X’, though outside the unit managed by ‘A*, may have some formal authority over A's unit:

(a)   Lateral relationship should be fostered.

(b)   Specialists should preferably be part of a work group that includes operational personnel.

(c)   Creation of jobs with widely conflicting roles should be avoided.

(d)   Too much emphasis on status may inhibit communication and co-operation.

(e)   Gap between formal and informal status should be reduced if conflict to be avoided.

Showing the way people contribute to various decisions make explicit their formal relationship to each other.

i.   To facilitate company-wide co-ordination of function.

ii.   To facilitate co-ordination of inter-departmental activities.

iii.  To reap economies of scale.

iv.  ‘X’ officially provides ‘advice’ to ‘A’.

In all the above cases ‘X’ has functional relationship to ‘A*.

(c)   Personal assistant

A person may be related to his superior by giving him and him alone general help with his managerial work.

Advantages

i.    Training ground.

ii.  Relieve burden on top management.

Against

i.    P.A. may abuse his position and undermine authority of others.

ii.   Many P.A.s may reflect inability to delegate.

Informal relationships:

(d)   Lateral relationship

People at roughly the same level communicate informally to co-ordinate their individual efforts. Saves time in that communication by-passes common co-ordinator which may be desirable for minor issues.

Relationships between departments

Operational Depts.—Those depts. which create and sell the company's products.

Specialist Depts. Those that provide specialist services.

5.   Work Organization, i.e. grouping tasks to form individual jobs.

(a)   Break down work to reap economies of specialization as far as volume of work justifies.

Advantages of specialization:

i.    Allows intensive use of scarce talents.

ii.   Skill increases from constant practice.

iii.  Changeover time reduced.

iv.  Allows economic use of machinery with less scheduling, queueing or duplication.

v.    Training time reduced.

vi.  Encourages mechanization.

(a)   ‘Job enlargement’ recommended. Since monotony can be characteristic of job, each job should be designed so that it is satisfying to do —a challenge.

i.    Incentive to effort.

ii.   Reduces tendency to frustration, therefore less industrial strife.

(b)   Production layouts should not be designed to isolate one individual from another. Other ways should be found to discourage idle gossip. Layouts should encourage development of work groups with high morale.

(a)   Simplify decision-making to minimize reference to higher authority.

(b)   Design job with worker's physiology and mental limitations in mind. Emphasis not on how work should be shared out among workers but on how work should be divided between man and machine.

Co-ordination losses as increasing specialization increases interdependence:

i.    Bottlenecks in work flow.

ii.   Communication problem to achieve integrated effort means more supervision.

iii.  Work duplication.