Features and Limitations of Departmental Organization.

Features of Departmental Organization:

Overall control rests with the minister: It is the minister who delegates authority to various levels of the organization. He is responsible for such an organization and is answerable for the efficient operations of the undertaking to legislature.

Employees are civil servants: As the employees of departmental organization are civil servants, their terms and conditions of service are same as for other government employees.

Financed through budget appropriations: Such organizations depend upon government for finance. They get the amount from government treasury through annual budget appropriations and have to pay back the revenue into the treasury.

Accounting and auditing systems: It is subject to budget, accounting and audit controls. Because of this reason, it is treated on par with other government organizations.

Sovereign immunity: Sovereign immunity of the state is enjoyed by such an organization because it is an integral part of the government. It can only be sued after getting the Governments consent.

Limitations of Departmental Organization

Excessive parliamentary control: In such an organization, there is not much scope for any initiative and skill because the minister is completely answerable to Parliament for day-do-day activities. This in turn causes delay in decision making.

Lack of professional expertise: Civil servants who often lack business acumen manage these undertakings. Understanding, commitment and responsibility gets hampered as there is no bar on transfer of these officers. Decisions may get delayed due to rigid adherence to procedures and formalities.

Bureaucracy and red-tapism: Evils like red-tapism and bureaucracy exist in departmental organization. There is less scope for initiative because every decision is taken according to rules, regulations and precedents

Absence of competition and profit motive: Such organizations are established in order to render services. Commercial principles are neglected which are important for their success. Little incentive is there in order to improve their operational efficiency because of lack of competition.

Financial Constraints: These organizations depend completely on government for raising their capital because they are not allowed to raise finances on their own. Sometimes, it happens that these organizations suffer because of shortage of funds. They are subject to budget, accounting and audit controls. Because of this, they have less flexibility in financial matters.

Suffers from political instability: Such under takings are victimized because of political changes and instability. These are subject to political changes and attacks motivated by political considerations. These organizations work at the mercy of political party which is in power.

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