Functions Hierarchic Control Play in Firms - Essay Example

?What functions does hierarchical control play in firms/organizations Introduction Most of the businesses are established with a view to make and maximize the profits of their shareholders and owners. Businesses normally involve owners, managers and subordinates. The managers control the subordinates in order to carry out the day to day running of the business. Hierarchy is the way in which the organizational management structure has been established. Hierarchy, in other words, is the way in which the management of the business is formed and control is exercised. The term hierarchical control defines the control which moves down from the top management’s control over to the bottom line workers of the company. There are several management levels which are decided and organized in order to create a more comprehensible organizational structure. Managers at each management level have control over the employees who are working directly under their surveillance. Organizations normally design organizational charts to show the structure of the organization, levels of management and easy structure of the employees working under the control of each manager (Reyazuddin 2010; Stokes 2002; Sisk 1973). Hierarchal Control Businesses are aimed to maximize the wealth of the shareholders. To pursue this goal the business activities are divided and the control is also spitted up to ensure that the work performance at each level of management is up to the standards. The hierarchical control enable the organization to improve the efficiency of the business’s overall performance as the manager at each level of management is responsible and answerable for the performance of his division or workers working under his control. In order to improve his/her performance, managers put their best efforts to improve the work efficiency and quality at their level. Their efforts may be biased and may be aimed at the achievement of their personal interests but the result of those efforts, normally, helps in improving the business’s efficiency. Hence, we may say that hierarchical control helps organizations in achieving their major aim of maximizing profits i.e. by improving efficiency and quality of work. Hierarchical control provides the basis of coordination between employees. A number of people are involved in the running of the business. There is a need to control the operations of the business and control the operating activities that are performed by different individuals. The hierarchical control helps in identifying the place, position and responsibilities of each individual. The hierarchical chart provides the basic understanding of who is responsible for a particular work and to whom is that individual accountable. Hierarchical control plays a vital role in keeping the organization knitted and its operations controlled. The hierarchical management is provided fixed tasks and targets at each level. The work of one department, normally, does not interrupt the work of the other. The organizations operations are, hence, carried out more effectively. However, lack of communication in such organizational structures may end up creating difficulties at each level. The over/under production by one department may end up creating confusing and problematic situations for the other and so on (Stokes 2002). Hierarchical Control requires the managers to analyze and influence the performance of the employees working under their control. In order to improve the performance of their division or sector, managers tend to rely extensively on reward systems, motivational techniques, delegation of authority, exhaustive rules and policies and other attractive offers for the employees to improve their work quality. These offers and schemes are sometimes beneficial for the organizations in the short run. However, such schemes bring more benefit for the manager who is responsible for a particular task or division. His immediate attention and offers motivate the workers to perform their task efficiently and as accurately as the manager requires. However, such behaviors of the employees and such techniques by the managers result in over reliance of the staff on managers. This may result in loss of interest by the staff in the long run and the efficiency of the employees may be lost in the future (Reyazuddin 2010; Witzel 2000). Organizations are structured in a number of different ways. The span of control refers to the number of subordinates who are the direct responsibility of one manager in a hierarchy. The higher is the number of subordinates accountable to one manager, the wider is the span of control. A management structure which involves higher number of hierarchical levels points towards a narrow span of control and implies that the organizational management follows a tall structure. On the other hand, a flat structure is the one where control is spread in a horizontal manner and less hierarchy levels are found. Wider span of control involve lesser number of management hierarchies, hence the communication process becomes faster and more efficient. Fewer hierarchy levels require lesser costs to be managed as the number of managers require to control employees reduces. Tall structure of management, on the other hand, has more hierarchy levels. It may increase the costs related to the managers’ remuneration related costs but it may be more beneficial for the performance of the business. A tall organization helps the managers in communicating the decisions, policies, tasks and responsibilities with the employees under their control more easily. A manager responsible for a fixed number of subordinates may control them more efficiently. Managers may be able to communicate ideas for the improvement of the particular task and attain feedbacks from the employees. Hierarchical control enables the managers to directly interact with the employees under their supervision (Stokes 2002; Sisk 1973). Hierarchical Control refers to the delegation of authorities and responsibilities to the lower level staff/manager in the hierarchical structure. The delegation of responsibilities must be accompanied by the level of authority delegated to each manager. For instance, a manager responsible for the purchasing department should be given the space, authority and power to make decisions on the basis of market analysis, current trends and so on. The manager of purchasing department should be given the authority of organizing the purchased material by delegating the work to the staff working under his control. This delegation of responsibility and the authority to record the material information given to the subordinates help the purchasing department’s manager concentrate on other issues like finding the best supplier who offer the same quality material at lower costs or finding the best option to purchase either by using bulk purchase discount or cash discounts offered. Hence, hierarchical control enable delegation of authority which helps the managers of each level to concentrate on the work which they are responsible for and delegate responsibilities to the lower level employees who are efficient in performing the task (Stokes 2000; Reyazuddin 2010). Hierarchical control motivates departmental distribution which enables teaming. The employees working in one department will move along like a team and each individual will have clear understanding of what the management expects of him and what are his responsibilities regarding the departmental targets. The activities and actions of the team are hence controlled by the manager and his supervision stops employees from ignorance of their responsibilities or carelessness in their work. Hierarchical control hence improves departmental performance and efficiency. The distribution of authority and responsibility, however, may end up in wrong decisions being made by a department which may be beneficial for the departmental performance but might result in a loss for the business. For instance, if the production department’s manager produces more units per day and increases the overall efficiency of his department to acquire rewards or promotions, it may still act as a loss making decision for the business as a whole. The business may not require the extra production as the demand for the goods may remain stable. The extra units produced may be deteriorated and the overall efficiency of the business may be worsened. Hence, hierarchical control of decision making and operational efficiency may or may not be beneficial for the organization. There is a need to have loyal staff and some kind of control over the performance and decisions of the managers at each level of hierarchical structure of management (Witzel 2000). Conclusion In conclusion, we can say that the hierarchical control enables the top level management to concentrate on the strategic management issues and decisions. The managers at each level are responsible for a number of decisions and targets to be met. These managers have control over the subordinates who are given a set of rules, targets and activities by their relevant managers. The hierarchical control helps the managers control the performance of each individual/subordinate and helps in maintaining the level of quality required by the top management. The hierarchical structure, however, needs closer monitoring of the decisions made at each level. Lack of communication and coordination between departments and hierarchies may end up creating difficulties for the business’s overall efficiency. Hierarchical control motivates on team work and encourages employees to work together in order to gain advantages like rewards, increased remuneration and so on. The team work may, however, be aimed at achieving targets set by the manager of the department rather than the organizational objectives. Hence, such a distribution of authority may not be always beneficial for the business as managers of each department in the hierarchy will be motivated to improve the performance of their department. The performance of one department may be linked with the performance of the other and higher or lower quality work form one department may influence the work of the other department. We may, hence, conclude that coordination and communication between the levels of hierarchy is a key factor for the organizational success (Sisk 1973; Reyazuddin 2010). Bibliography Top of Form Sisk, H. L. (1973). Management and organization. Cincinnati: South-Western Pub. Co. Top of Form Reyazuddin, M. (2010). Business management. New Delhi, India: Serials Publications. Top of Form Witzel, M. (2000). Marketing: Early theories of business and management. Bristol: Thoemmes. Top of Form Stokes, D. (2002). Small business management. London: Continuum. Bottom of Form Bottom of Form Bottom of Form Bottom of Form Read More