The EXCEPTION PRINCIPLE

The exception principle (also known as management by exception) related to the parity principle. The exception principle states that managers should concentrate their efforts on matters that deviate significantly from the normal and let subordinates handle routine matters. The exception principles can be hard to comply with when incompetent or insecure subordinates refer everything to their superiors because they are afraid to make decisions.

The key concept of Bureaucracy is Hierarchy-the ranking of individuals according the amount of rational-legal authority they can exercise when they are fulfilling the responsibilities of their positions. When an individual comes into the organization, she is assigned a particular position. An immediate superior has power over this individual, that is, the ability to give commands that she must accept. This individual, in turn, has power over her own subordinates. Typically, an individual reports to only one superior to avoid confusion and role conflict, so there is unity of command throughout the hierarchy.

Formal and informal organizations

Every organization structure has two systems of operation: Formal system is composed of the recognized and formalized lines of communication, authority, and control. INFORMAL SYSTEM is much more subtle and invisible in the organization chart.

Organization chart:

Formal Organization: Informal Organization: -have planned structure -not formally planned -deliberate attempts to create -arise spontaneously as a result of patterned relationship interactions -usually shown by the chart -not depicted in a chart -traditional theory advocates formal -human relations theory stresses organizations informal organization

The formal organizations have a rigid organization structure showing the functional roles while the informal organizations lack rigid structures. Often the informal organizations are formed for the purpose of satisfying some social needs. Various clubs, teams, associates, and similar other groups come under this category. All business, industrial organizations and educational institutions are formal organizations.

Centralized and decentralized organizations

One of the most important questions that a company must answer as it grows is whether or not to continue management that a centralized in one person or to decentralize management by delegating some of its authority to subordinates. In a centralized management organization, major decisions are made by a few executives in decision making. Even when there are multiple branches, most of decisions are made at the main office rather than at the local branch. Centralized management in these organizations assume that the responsibility for buying, advertising, marketing, accounting, and other functions will be conducted at one location even though there are many operating branches. In a decentralized management organization, authority rests only in a few hands and most of the decisions are made by these few. On the other hand, in decision making is distributed throughout the organization.

The many functions of staff

Centralized >Decentralized -Control by few because men at -Control by many because men at the top believe they are indispensable the top believe that participation -As a result of the above attitude, decisions will increase efficiency and are made by the top management effectiveness -The drawback is potential paralysis -As a result of the above attitude of decision making and poor moral decisions are made throughout the organization -The drawback may be controlled by many.

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