Organizing people in a manner that allows reducing costs to a minimum while increasing performance to a maximum is one of the central problems that any middle- and large-size business encounters. In this regard, the current essay seeks to discuss some of the crucial questions related to people management. They include the advantages and disadvantages of centralized and decentralized company structure, existing types of authority, and methods to reduce the conflicts between line and staff.
Firstly, any company management design can be generally divided into centralized and decentralized control. The former implies that all the important decisions in the organizations are delivered by top-level leadership, while the latter signifies that the lower-level administrative units are delegated some of the power functions. Overall, it is hard to say which of the two structures is better as they each have some advantages and disadvantages. For example, centralization is usually associated with faster decision-making and reaction to new realities, more focused development, and a clearer authority structure than decentralization. Therefore, centralized management can be much better in such situations as, for instance, economic crises. However, on the other hand, an overly consolidated authority may lead to worse worker performance, less innovativeness, and reduced employee loyalty.
Now, it is important to distinguish between various authority types that can be present in an organization. The first type is the advisory authority which implies that staff departments serve as experts and consultants for line departments but cannot enforce their decisions. Next, line authority is the manager’s ability to influence other’s performance directly. Finally, the functional authority provides staff personnel with limited line authority over certain organizational functions.
Functional authority can be a good choice for many organizations to balance the managerial power of staff and line departments. Nevertheless, there is a drawback of such management type, which is a potential conflict between line and staff due to the lack of command unity. To address this issue, top-layer administrators should ensure that functional and line authorities do not overlap, but if it happens, the higher managers should be constantly available to resolve the conflict. Another way to avoid excessive conflict is to organize free communication between staff and line departments, which would allow openly discussing and collectively resolving all the problems.