Importance And Impact Of Decentralized Management System In Organizational Activities

Advantages of Decentralized Management System

Discuss about the Exploration of Leadership Style and Identity.

The framework that include the policies, procedure and the processes of business activities used by an organisation in order to achieve its business objectives is known as the management system (Musinguzi et al., 2018). The management system is developed to make sure that there is an individual or a senior management group that is responsible for making decisions on the business activities. This management decision system involves the leadership responsibility, identification of the legislative and industry standard, communication with the stakeholders and also to monitor the progress of the project (Sax & Torp, 2015). In case of multi-national or an international organisation, it would not be feasible for a management to take decision as a central authority. This is the reason that decentralisation of the management is considered to be most effective for an organisation operating from different regions.

The purpose of the research proposal is to give an overview to undertake the study to understand the importance and the impact of the decentralisation management system in an organisation. Tata Group of companies has been selected as an organisation for the case study as this organisation follows a decentralised management structure to operate in different countries and regions.

As commented by Rante and Warokka (2016), multi-national organisations often have to come with the business strategies in terms of structuring and designing the organisation when it comes to manage the people and the business activities of the organisation. Organisational activities depend on certain factors like the bureaucratic style, the economic, political and the cultural environment of the country or the region. A centralised management system of an organisation would never allow an organisation to make a decision based on these factors (Harber, 2017). Decentralised management structure can often help the organisation to make responsible decisions depending on the several external and internal factors that would be suitable for that organisation.

The decentralisation management system gives the responsibility to the top management to undertake the major decisions and responsibilities and the decisions are delegated to the lower and middle managers to make sure that the top level managers focus more on the major decisions. Considering the centralised organisational system, Al-Hussein and Elbeltagi (2016) commented that in such system the entire organisation depends on the decision and the direction given by the higher authority. This situation often leads to miscommunication, general misconception on the business planning and also it leads to the inability of the individuals to make decisions at each level of the business depending on the situation.

Disadvantages of Decentralized Management System

In today’s business scenario with the increase in global market competition and the importance of rapid decision making process, a centralised management system would rather decrease the efficiency of business activities. By the time, the orders from the central decision makers will reach the particular individual, it would become rather late and the business might suffer (Shan, 2016). Thus, a decentralisation management system and giving the right decision making ability to the right person at a particular managerial level is important.

1. To identify the importance and benefits of the decentralisation management system in a multinational and international organisation
2. To evaluate the factors that impacts the decentralised management system of an organisation
3. To examine how the employees of an organisation is affected by the decentralised management system of an organisation

Decentralisation management system is a leadership technique that allows the managers at various levels to make more rapid and decisive decision making. This system also creates a sense of clarity about the rules and regulations within their own organisation. Thus, understanding the importance and the impact of the decentralisation system on an organisation will provide a clear idea of the leadership approach to be undertaken.

It is expected that enough data would be collected by the means of both secondary and primary data collection method. The literature review will provide a clear understanding on the advantages and disadvantages of the decentralisation of management system based on the viewpoints of several authors. It is also expected that by the means of qualitative primary research, the actual business process of the organisation will be understood. It might happen that the employees would not be interested enough to share their opinion or their response might be much inclined towards their organisational activities. In such cases, gaining the right information might become very challenging. In order to overcome such situation, they should be made aware of the entire study is completely for academic purpose and so their co-operation in this regard in important. All these findings will finally help to evaluate the research objectives. It is expected that the decentralisation management system will be found to be effective for an organisation considering the recent business scenario.

In the view point of Ngo, De Boer and Enders (2015), decentralisation is the process when the authorities are transformed to the managers at different levels giving decision making abilities to the managers in the lower and middle level of an organisation. There are certain factors based on which the concept of the decentralisation is imposed in an organisation; the most important factor being the size of the organisation. Decentralisation of the organisation will naturally become important when the size of the organisation will increase because an organisation cannot be managed from a leader or manager from a central position (Ólafsson, 2016). In such cases, it becomes very important that maximum power is given to the manager or the individual at the particular branch rather than relying on a particular person at the centre. In this respect, Soodan et al., (2017) commented that it is again challenging for the management to manage the organisation if the manager is not efficient enough to handle the situation. Contradicting this point, Weston (2015) commented that decentralisation of the organisation actually helps in improving the management and the decision making of the managers at any level. It is always a matter of experience and knowledge that an individual at the management level gains in order to improve the decision making skills and ability. Therefore, in a way this management system can actually act as a motivation for the managers at the various levels and there would be a development in the overall organisational activities as well. Adding to the motivation factors, Ohemeng and Huque (2017) stated that decentralisation structure is actually a semi-autonomous means of leadership style that gives the opportunity to the managers at different levels to show their ability in managing and improving the organisational capabilities.

Factors Determining the Need for Decentralized Management System

Decentralisation is important to make prompt decisions for an organisational activity. For instance, it should be noted that every organisation tries to abide by the rules and regulations of the region where they are found to operate (Bush & Glover, 2016). It might be very difficult to understand the present scenario and make prompt decision for a manager at the central level. Therefore, it is only possible for the person sitting at the particular regional office to make the right decision. This way, the manager can also come up with some important decision making ideas that are innovative and creative at the same time. Moreover, making prompt decision is important to avoid any kind of delay or mishap in carrying out the business activities. In fact, reading Mbau and Gilson, (2018) it has been found that at many instances, it happen that a centralised organisation is find is very difficult to communicate and co-ordinate with the employees of an organisation and as a result of which, the management takes the decision of making it a decentralised one so that the operational activities can be carried ion smoothly. All these factors definitely adds to the learning and the growth of the organisation as a whole and a divisional head is needed in order to make sure that the organisational activities having been performing in a well-planned way (Harber, 2017).

If the other aspects of the decentralisation technique are seen, it has been pointed out by Purce, (2014), that decentralisation process is actually not cost effective and an organisation needs to hire a manager at every level. In addition to this, there also remains a kind of inconsistency among the leaders or the managers and that the individual at the managerial level if for some reason is made unavailable then the entire organisation would be affected and it might obstruct the regular working performance of the organisation. On the other hand, considering the size of the organisation and also the regional viability of the organisation, it is indeed important that there remain a manager or leader at each level in order to sub ordinate the other employees working in the organisation (Lane, 2016).

The research methodology shall outline the detailed method to be undertaken for the research study along with the justification of using the particular methodology.

The three types of research philosophies are interpretivism, positivism and realism. The research philosophy helps to understand a particular study in details by the means of in-depth analysis of the various theories and models. For this study, positivism research philosophy shall be selected as it will help to investigate the topic in a logical and critical manner rather than just in a subjective way (Sarto et al., 2016). The other two philosophies have been rejected because that will not help to investigate the topic in details.

Importance of Decentralized Management System for Prompt Decision Making

Deductive and inductive are the two research approaches that are used for writing a research paper. For this study, the deductive research approach shall be used that will help to understand the theories and models based on the topic (Rudnick, 2014). The inductive research approach will be avoided because developing new theories and models for the study will be challenging and it would not provide enough information as well.

The three research designs are the descriptive or the analytical research design, exploratory and the explanatory research design. The descriptive research design will be used for this study because various theories and other models will be used based on which the research study will be written (Fabijan, Olsson & Bosch, 2015). The other two research designs will not be used because in that way, a detailed research will not be conducted.

Research strategies include case studies, focus groups, survey methods and others. For this particular study, qualitative research strategy and the interview procedure will be taken into consideration in order to understand the point of view of the employees working for the Tata Groups of company (Bojic, Yoshimura & Ratti, 2017). The survey method might not be fruitful as it will not give a clearer picture of the decentralisation management procedure.

Non-probability sampling technique will be used for this research as the employees of the Tata Groups of companies will be interviewed and so there is no scope of the probability sampling technique (Fusch & Ness, 2015). Probability sampling would have been used if there were a large number of respondents involved along with many organisations. For the analysis, it is expected that 5 employees will be interviewed by providing them a set of interview questionnaire. Thus, a semi-structured interview will be carried on.

Both primary and secondary data will be collected. Secondary data will include the existing literature and the models and concepts on the topic and also the reports and other news or information available on the Tata Groups of Company. The primary data as mentioned will be collected by interviewing the employees of the company (Lessler et al., 2015).

The data collected from the primary and secondary research will be evaluated by the means of a thematic analysis. The data collected from the secondary sources will be evaluated by linking it with the set objectives in a thematic way. The data collected by the means of the interview will also be evaluated by the means of thematic analysis (Neelankavil, 2015). The themes will be presented in the forms of tables and graphs and in doing so, Excel can be used.

Research Methodology

It is important to maintain an ethical guideline throughout the research. The secondary research carried on by analysing the various literatures and the related concepts and theories will be referenced throughout the analysis. This way, there will be no act of plagiarism and that an ethical approach will be maintained (Merriam, 2015). For the primary research and carrying out the interviewing the employees, each respondent will be supplied with a consent form that they will have to fill to show that they have been interviewed by their own consent. In addition to this, it has to be kept into consideration that there should not be any kind of promotional approach towards the research. The research should be primary based on academic purpose and thus, there should not be any kind of promotional content or advertisement logo in the questionnaire that will be handed over to the respondents (Lewis, 2015).

The aim of this chapter is to introduce the topic and to give a clear description of the rationale of the topic. The chapter shall include a brief background of the study, a discussion on the previous studies related to the topic, the research aims and objectives along with the research questions.  In addition to this, the significance and the justification of the study will also be given.

Based on the objectives of the study, the literature review will be divided into various themes and sub-themes covering the main points based on which the conceptual framework will be framed. These themes will be evaluated on the basis of the existing literature. A critical analysis of the peer-reviewed journals will be carried on in this chapter. Supporting theories and models shall be evaluated as well.

A detailed discussion on the methodology undertaken to carry out the research will be discussed in this section. This shall include the research philosophy, approach, design, strategy and other methods undertaken. This methodology will be written along with the proper justification of undertaking such research method.

The analysis of both primary and secondary data will be done in this section of the study. The primary data will be represented in the forms of tables and charts as well as a thematic analysis approach will be undertaken. The primary data analysis shall also be linked with the secondary data collected.

This will be the concluding chapter of the study where the findings from the literature review and the primary data will be linked with the set objectives of the study and thereby, concluding the research. This chapter will also include few recommendations that an organisation might inculcate in order to improve its business activities. In addition to this, the chapter will also talk about the limitation of the study and the future scope of the study.

Conclusion

Below is a list of the things that would be required to accomplish the research study. An amount of 3,000$ would be required to carry out the 12 week long research.

Materials/Need	Amount ($)	Justification
Data base access	500	To get adequate and relevant data of the secondary sources, especially from the peer-reviewed journals that is mostly paid and need access.
Library fee	250	The library access is needed to get authentic data and information and so library fee would be needed.
Computer, internet and software	500	In order to do the data analysis, there might require the use of software that has to be bought along with the internet connection
Stationery	100	Stationaries including papers, pens, clips and other materials that will be needed at every instances while carrying out the project.
Questionnaire	20	Developing and printing the questionnaires to be handed over to the respondents will require a little money
Hotel rent	700	It might be required to stay at a particular hotel or elsewhere while conducting the interview
Interviewing	100	Some amount of money will also be needed at the time of interviewing the respondent as an approach to enter the organisation.
Miscellaneous	500	Apart from these expenses, there would arise the necessity of other things as well
Total	2,670

Table: Budget of the research

(Source: Self developed)

Activities	1st Week	2nd & 3rd Week	4th-5th Week	6th-8th Week	9th Week	10th-11th Week	12th Week
Selection of the research topic	ü
Beginning of Data collection from various secondary sources	ü	ü
Creating the layout of the dissertation		ü
Critical Literature review		ü	ü	ü
Interview of the respondents			ü
Analysis and interpretation of  collected data				ü	ü	ü
Findings of the data					ü	ü
Conclusion of the study						ü
Formation of draft						ü	ü
Submission of final work							ü

Table: The time table

(Source: Self developed)

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