Wednesday, December 14, 2011

Delegation - Organization Development phase

In the last blog, we looked at the "Direction" phase of a phase in the development of an organization. In today's blog we look at the next phase of Organization Development - Delegation. We understood from the last blog, that the struggle for more responsibility at lower levels of the organization leads to the process of delegation. At this juncture, the company could grow only if a good amount of delegation is in place. 

We begin today's blog from the point of such delegation. As the phase "evolves" we find that:
  • Much greater responsibility is given to the manager of the plants and market territories.
  • Profit centers and bonuses are used to stimulate motivation
  • The top executives at headquarters restrain themselves so managing by exception, based on periodic report from the field.
  • Management often concentrates on making new acquisitions which can be lined up beside other decentralized units
  • Communication from the top is infrequent, usually by correspondence, telephone, or brief visits to the field locations.

Such delegation enables the company expands through enhanced motivation at lower levels. The decentralized managers are able to penetrate larger markets, respond faster to customers and develop new markets.


This growing delegation to the lower levels sows the seeds of the next revolution. The top management begins to sense a loss of control. The highly diversified operations are akin to the field managers running their own show with little to no concern for coordination, money, and technology and man power with the rest of the organization!

The top-management attempts to regain control over the total company. A return to centralized top-management at this stage is not an option. The companies that really move ahead are the companies which would have to find a new solution in the use of special coordination techniques.

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