Tuesday, November 17, 2015

Herbert Simon - Maintaining Organizational Efficiency Through Minimising Hierarchy Levels

Effective Decision Making is directly proportional to higher administrative efficiency. Decisions are made to pass by employees working in a company at different hierarchy levels. Before a decision is made and is implemented it goes through employees at different levels. Decisions are made at top and then conveyed down to bottom level employees for implementation. 

Here comes the problem of interpretation of the decision by different employees at different levels of hierarchy. The problem can be divided under 3 heads – 

Communication Distortion, Time factor and Different parameters.

Communication distortion means that as a decision passes through different levels the meaning of that decision changes slightly with every level it passes.

Time factor comes in play when the levels in hierarchy are more as the time taken for transferring the decisions to the lowest level increases and this leads to administrative inefficiency.

Different parameters – When a decision passes different levels it is adjudged by different individuals having different mindset and intelligence and hence they will interpret decisions differently leading to distortion and administrative inefficiency.

So on basis of above points we can sum up that organizational levels should be optimum and not too much to maintain administrative efficiency.

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