An informal organization refers to the aggregate of the personal contacts and indications and the associated groupings of people working within the formal organization. Defines the levels that make up the organization's structure Provides for the flow of communications Job Scope - Number of different types of operations performed on the job. Job Depth - The freedom of employees to plan and organize their work. Power - Ability to influence, command, or apply force. With high decentralization, a great deal of authority is delegated to lower levels of management.
Decentralization allows for more flexibility and quicker action.
Decentralization may result in duplication of efforts and loss of control. Empowerment - Form of decentralization in which subordinates have authority to make decisions. Four Principles Based on Authority Parity Principle - Authority and responsibility must coincide. People need to have enough authority to do their job. When a manager concentrates on matters that deviate significantly from normal and lets subordinates handle routine matters.