Coordination, Nature, Importance, Types, Principles, Limitations

The purpose of organising, division of work, departmentation, span of management, centralisation and decentralisation, delegation of authority and organisation structure is to optimally achieve the organisational goals. This is possible if departments of the organisation are co-ordinated in a unified direction.

Once the activities of the organisation are broken into smaller units which are re-grouped into departments (on the basis of similarity of features), managers need to coordinate the activities of these departments by communicating organisational goals to each department, setting departmental goals and linking the performance of each department with others so that all the departments collectively contribute towards the organisational goals. Coordination is “the process of linking the activities of various departments of the organisation.”

It is “the process of integrating the objectives and activities of the separate units (departments or functional areas) of an organisation in order to achieve organisational goals efficiently.”

Coordination is “integration of the activities of individuals and units into a concerted effort that works towards a common aim.” — Pearce and Robinson

Co-ordination maintains unity of action amongst individuals and departments. Absence of co-ordination will result in sub-optimal attainment of goals. In extreme situations, it may result in losses and liquidation of companies.

Co-ordination harmonizes and balances conflicting opinions of individuals and departments, promotes group effort and directs their movement in a unified direction — the organisational goal. For example, if production department does not coordinate its activities with the sales department, production may be more or less than the required sales.

Features/Nature of Coordination:

Coordination has the following features:

1. Group effort:

Coordination integrates the efforts of individuals and departments to make them work as a group. The group works to maximise group goals as well as organisational goals. It ensures that individuals work as a group to promote their individual and organisational goals.

2. Unity of action:

Every individual and department has his own perspective or way of achieving the organisational goals. Coordination ensures unity of action amongst individual and departmental activities. It ensures that activities of each individual, group and department are headed towards the common goal. All activities should be performed within the framework of policies, procedures etc.

3. Common goal:

Each individual and department strives to maximise its goal. Maximisation of departmental goals at the cost of organisational goals can be harmful for the organisation. Coordination maintains balance amongst individual, departmental and organisational goals. It ensures that resources and tasks are assigned to individuals and departments in a manner that working of one department promotes the working of other departments.

All individuals, groups and departments should have a common purpose, that is, achieve the organisational goals. Sales department, for example, may want to increase expenditure on advertisement to increase sales. Finance department, however, may not release funds for advertisement to control financial costs. Coordination harmonizes conflicting departmental goals towards a common goal, that is, goal of the organisation.

4. Continuous process:

Coordination is not a one-time attempt to integrate the individual goals. It is a continuous process that keeps going as long as the organisation survives.

5. Managerial responsibility:

Co-ordination is the responsibility of every manager at every level for every operative function (production, finance, personnel and sales). All managers continuously coordinate the efforts of people of their respective departments.

6. Essence of management:

Coordination is not a separate function of management. It is required for every managerial function. Managers coordinate human and non-human resources, internal and external organisational environment, while carrying out the managerial functions of planning, organising, staffing, directing and controlling. Coordination is, thus, the ‘essence of management.’

7. Synthesis of efforts:

Coordination integrates and synthesizes the efforts of people of all departments at all levels towards common organisational goals. It also synthesizes the organisational resources (physical, human and financial) to collectively contribute to organisational goals.

8. Necessary obligation:

Coordination is not something that managers may or may not strive for. All managers (also non-managers) must direct their efforts towards a common goal, considering this as their necessary obligation. It is an inevitable area of management.

9. Deliberate effort:

Coordination is not a spontaneous effort of managers. Managers make deliberate efforts to coordinate the departmental activities.

Importance/Need for Coordination:

The need for coordination arises because individuals and departments have different goals. They depend on each other for resources and information. Managers continuously coordinate their activities to ensure that all individuals and departments use organisational resources and information for successful attainment of organisational goals.

Coordination results in the following benefits:

1. Non-routine jobs:

Non-routine jobs need constant flow of information, both vertical and horizontal. Unless there is proper coordination amongst these jobs, they cannot be performed efficiently. Coordination, thus, helps in effectively carrying out non-routine jobs.

2. Dynamic activities:

Organisations operate in the dynamic environment. Environmental changes have to be adopted by organisations for their survival and growth. Coordination helps in integrating activities which constantly change according to changes in the environment.

3. Standards of performance:

When standards of performance against which actual performance is to be measured are too high, managers coordinate the various business activities to ensure that high performance standards are achieved.

4. Interdependence of activities:

When different units of the organisation are dependent on each other for resources or information, there is great need for coordination amongst them. Greater the interdependence, greater is the need for coordination. According to Thompson, there are three types of interdependence: pooled, sequential and reciprocal interdependence.

In pooled interdependence, organisational performance depends upon pooled or combined performance of all the departments. This happens when different divisions make different products not dependent on each other.

The need for coordination is, therefore, minimum. In a diversified market, if a company manufactures textiles and electronic items (for instance, Reliance Industries), the performance of textile industry does not depend upon the performance of electronics industry and nor does the performance of electronics industry depend upon that of textile industry but the overall coordinated performance of both the industries affects the performance of Reliance Industries.

If the need arises, financial and human resources can be transferred from one unit/department to the other if it affects the overall performance of the industry. Losses in one industry can be compensated by transferring funds from the profit-making industry to the loss-making industry.

In sequential interdependence, performance of one unit depends upon that or another (marketing department depends upon production department to make sales). This requires coordination between production and sales departments.

In reciprocal interdependence, there is give and take relationship amongst units. If trucks have to be loaded at the assembly station and unloaded at the warehouse, there is need for pooled interdependence. The loaded trucks have to be unloaded at the warehouse and unloaded trucks have to come back in time for re-loading at the assembly station.

If there is lack of coordination in the speed at which the trucks move, there will be huge wastage of time which may even result in loss of orders in extreme situations. With increase in degree of interdependence from pooled to reciprocal, the need for coordination also increases.

5. Specialisation:

Specialisation leads to concentration on very narrow areas of job activity. Individuals tend to overlook overall perspective of the job. This requires coordination to direct all the activities towards a common goal.

6. Growing organisation:

In growing organisations, number of people and divisions become so large that it becomes difficult for top managers to coordinate the activities performed by all of them. Various techniques of coordination (rules, procedures, plans, goals, slack resources etc.) help in unifying diverse and multiple organisational/departmental activities towards the common goal.

Large organisations have large number of people with diverse perspectives. In contemporary organisations, there is workforce diversity. People come from different nations, cultures, educational background, needs, habits etc. In the first instance, people work so that they satisfy their individual goals.

Coordination aims to integrate individual goals with organisational goals so that both are satisfied. Satisfied employees work towards organisational goals with commitment, dedication and loyalty than unsatisfied employees. Coordination integrates individual goals with group goals and group goals with organisational goals.

7. Promote group effort:

In the absence of coordination, each individual and department will carry out their objectives in a manner that they perceive as the best. People tend to maximise their individual goals. This may, however, not be the best for the organisation as a whole.

Coordination helps in promoting group effort rather than individual effort for optimally achieving the organisational goals. It harmonizes individuals goals with organisational goals and satisfies individual goals through satisfaction of organisational goals.

8. Unity of action:

Organisations have diverse work force, thoughts, resources, goals, activities and skills. Coordination helps to unify these diverse set of actions towards a single goal and, thus, maximise their use.

9. Synergy:

Coordination facilitates the sum total of output of group to increase by more than the sum total of their individual output. It integrates work of different units and produces synergistic effects by increasing the overall organisational output.

Coordination between functional departments; production finance, personnel and marketing ensures optimum utilisation of physical, financial and human resources. Production department produces according to sales estimates, finance department releases funds accordingly and human resource department recruits people according to needs of different departments. Coordination ensures that facilities remain neither under-utilised nor over- utilised.

Types of Coordination:

Coordination can be of the following types:

1. Internal and External Coordination, and 
2. Vertical and Horizontal Coordination.

1. Internal and External Coordination:

Coordination between the activities of departments and people working within the organisation is known as internal coordination. Coordination between activities of the organisation with units outside the organisation (Government, customers, suppliers, competitors etc.) is known as external coordination.

Organisations are open system which continuously interacts with the environment through the input-output conversion process. They receive inputs from the environment, process them and give them back to the environment in the form of outputs. This cycle is repeated after receiving feedback from the environment about the acceptability of their products. This requires complete coordination between what environment expects from the organisation and what organisation expects from the environment, failing which, organisational survival can be in danger.

2. Vertical and Horizontal Coordination:

Both these types of coordination are the forms of internal coordination. Vertical coordination is achieved amongst activities of people working at different levels. It coordinates the activities of top managers with those of middle and lower level managers.

It is “the linking of activities at the top of the organisation with those at the middle and lower levels in order to achieve organisational goals.” Vertical coordination can be achieved through span of management, centralisation, decentralisation and delegation.

Horizontal coordination is achieved amongst activities of different departments working at the same level. It is “the linking of activities across departments at similar levels. It links the activities of four primary departments — production, finance, personnel and sales”.

The need for horizontal coordination arises when departments depend upon each other for information or products. When information is transacted across departments, departmental managers share their views on the same problem and arrive at innovative ideas and thoughts to deal with the situation. According to Jay R. Galbraith, “the more organisations need to process information in the course of producing their product or service, the more methods of horizontal coordination they will need to use”.

Different methods of achieving horizontal coordination are slack resources, information systems and lateral relations:

1. Slack resources means maintaining a cushion of resources like buffer time, money, material, inventory, people etc. by each department.
2. Information systems facilitate exchange of information among units of the organisation. Computers have eased the work of transmitting information to different departments. Information systems facilitate effective coordination amongst departments.
3. Lateral relations refers to relations between peer groups of different departments whose interaction (through direct contact or liaison officer or work groups/teams) helps in arriving at solution to the problem. Lateral relations allow the information to be exchanged across the scalar chain rather than people placed at higher levels in the organisational hierarchy. These relations are “coordination of efforts through communicating and problem solving with peers in other departments or units, rather than referring most issues up the hierarchy for resolution.”

Lateral relations can be maintained in the following ways:

(i) Direct contact:

Mostly prevalent at middle and lower levels, people of different departments directly communicate with each other to solve their organisational problems without involving the top managers. Coordination is, thus, achieved laterally without following the chain of command.

(ii) Liaison roles:

Rather than people of different departments solving their problems through direct contact, the problems are solved by a person who maintains direct contact with people of different departments. The person known as liaison officer, is a common link between the units or departments.

Though he does not have formal authority over the groups, he facilitates the flow of information and communication between them. He coordinates the efforts of diverse groups by dealing directly with departments where problems have arisen.

(iii) Task forces:

Where liaison officer cannot coordinate the activities of departments because the inter-departmental dependence is complex or because coordination has to be achieved amongst many departments, task forces are created to facilitate coordination.

A task force is a team of members from different departments (where the problem has arisen) who form a group and share information with respect to the problems of their respective departments. When solution to the problem is achieved, the task force is dissolved and members go back to their respective positions. Coordination amongst different departments is, thus, facilitated through task forces.

(iv) Committees:

Committees are formed to look into specific organisational problems which may be recurring in nature. A committee that looks into absenteeism, promotion and transfer of employees achieves coordination with respect to labour force, keeping it satisfied and committed towards organisational goals.

(v) Managerial integrators:

They are the specifically appointed managers who coordinate the products, projects or brands that involve inter-departmental dependence or interaction. They are usually product managers, project managers or brand managers.

Principles of Coordination:

Principles refer to fundamental truths on which an action is based.

The following principles help in achieving coordination:

1. Unity of command:

Unity of command means one boss for one subordinate. It will be difficult to achieve coordination if one individual has to report to more than one boss. Unity of command helps in coordinating the activities of individuals and departments.

2. Early beginning:

It follows the principle of earlier the better. Managers should initiate efforts to coordinate organisational activities right from the planning stage. If plans are implemented without coordination in mind, it will become difficult to coordinate the organisational activities at later stages.

Well begun is half done. Framing objectives and policies through participative decision-making are the strengths to achieve coordination. Participation allows members to know the importance of everyone in the organisation. It reduces conflicts, promotes commitment and harmony to create an environment conducive for coordinated efforts directed towards organisational goals.

3. Scalar chain:

It refers to chain or link between top managers and lower managers. It is the hierarchy of levels where information and instructions flow from top to bottom and suggestions and complaints flow from bottom to top. This chain facilitates coordination as top managers pass orders and instructions down the chain, necessary for subordinates to work efficiently.

Subordinates also pass upwards only those suggestions and complaints, which they feel should be brought to the notice of top managers through middle level managers. Passing of only necessary information facilitates coordination amongst various levels. Scalar chain, thus, facilitates coordination.

4. Continuity:

Coordination is a continuous process. It must be continuously carried out at all levels in every department. It starts the moment an organisation comes into existence and continues till the organisation exists. Coordination is not an option. It is the inevitable force that binds organisational members and resources together and, thus, is the backbone of organisational success.

5. Span of management:

It refers to the number of subordinates that a manager can manage effectively. It is important to place only as many subordinates under the direction of one manager as can be effectively managed by him. It affects the manager’s ability to coordinate the activities of subordinates working under him. Large number of subordinates under one manager can make coordination difficult.

6. Direct contact:

Direct or personal contact between managers and subordinates can achieve better coordination than indirect or impersonal contact. Face-to-face interaction amongst people of different levels or same level in different departments promotes understanding of information and thoughts. This facilitates effective communication and mutual understanding and through it, effective coordination.

7. Reciprocity:

It refers to interdependence of activities. Production and sales department, for example, are inter-dependent. The more one sells, the more one needs to produce. The more one produces, the more one attempts to sell what is produced.

The nature and extent to which organisational activities are dependent on each other are considered by managers when they initiate to coordinate the organisational activities. More the inter-dependence amongst organisational activities, more is the need for coordination amongst them.

8. Dynamism:

There are no fixed and rigid rules for coordination. Changes in organisational environment necessitate changes in the techniques of coordination. It is, thus, a dynamic and not a static concept.

Limitations in Achieving Coordination:

There are some limitations also in achieving effective coordination.

Some of these are discussed below:

1. Increased specialisation:

Though specialisation helps to increase organisational productivity, it also creates the problem of coordination. According to Paul R. Lawrence and Jay W. Lorsch, “people in specialised units tend to develop their own sense of the organisation’s goals and how to pursue them.” Higher the degree of specialisation, therefore, more difficult it is to coordinate the activities.

2. High interdependence amongst units:

Higher the degree of dependence of one unit on the other, greater is the need for coordination and more difficult it is to coordinate. Achieving coordination of units/activities with reciprocal interdependence is more complex than for activities with pooled interdependence.

Pooled interdependence:

Performance of one unit does not depend on the other, but overall performance of each unit affects the performance of the organisation as a whole. Thus, organisational performance depends upon pooled or combined performance of each unit or department of the organisation.

For example, an organisation is structured on the basis of products. Each product division has functional heads to look after activities related to its product. Success of one product division does not depend upon the other, but the overall performance of the organisation depends upon how successfully each product division operates its activities.

Reciprocal interdependence:

Where there is give and take relationship between different units, it is known as reciprocal interdependence. Loading the trucks for shipment, unloaded trucks coming back for reloading for further shipment is a two-way flow of activities between different units and a form of reciprocal interdependence.

3. Different approach towards the same problem:

If different departments look at the same problem in different ways, there will be problem of coordinating their activities. If a company wants to increase profits; production department may want to improve the quality of goods, while sales department may want to improve advertisement to increase the sale.

Finance department may aim at cost control as the means of increasing the profits. Since each department has different perception about the way organisational profits can be increased, top managers find it difficult to coordinate conflicting opinions of different functional heads.

4. Uncertainty about future:

Howsoever skilled and competent may the managers be in coordinating the activities of different units, changes in environmental factors can make coordination difficult. Unprecedented changes can result in failure of plans making coordination difficult. Internal uncertainties like strikes and lockouts also make coordination difficult.

5. Lack of skill:

Even in certain situations, where work flows smoothly, coordination becomes a problem if managers do not have the knowledge, skill and competence to coordinate. Coordination makes use of behavioural skills in dealing with people. Managers with autocratic style of leading can face problems in coordinating the efforts of their work force.

6. Informal groups:

Informal groups which are strongly bonded by forces of culture, social values and ethics can affect the ability of highly skilled managers to coordinate organisational activities.