Corporate Fin Mgt NDLM.PDF

(Nora) #1

ó Allocate funds to each decision package



  1. Decision Units:


3.1 In every organization there are several decision taking levels. A decision
unit is the same as a decision level. It is necessary identify and list out the
Decision Levels/Units in every organization. Decision levels/ units may be
identified area-wise or subject-wise, or both area- and subject-wise.

3.2 A decision unit should not be too small or too big in size. It must be of a
meaningful size, so that cost performance ratio (financial input and output
ratio) is convincing. If the decision unit is too small, the overhead costs
may be highly disproportionate to the performance. If the decision unit is
too big, the quality of monitoring of performance may suffer. Therefore,
it may be necessary to bring about structural re-organization in a
department in order to provide for an optimum decision unit from the
point of view of economy and effective monitoring.

3.3 In a Department, a decision unit may be at various levels: at the level of
the Head of the Department itself, or at the division level, or at the
District or Taluk or Hobli or Panchayat or Municipal level. Sometimes,
there may be autonomous bodies under the control of a Department. Such
autonomous bodies may be taken as separate decision units.

3.4 The objective of proper classification and size of the decision units are to:

? Define or redefine authority and responsibility
? Provide effective internal co-ordination
? Carry out analytical studies, e.g. work load study; resource-performance
ratio study; machinery-performance ratio study, etc.
? Identify redundant expenditure
? Remove duplication of expenditure
? Re-deploy surplus resources
? Resize tasks with reference to local needs; etc.,


  1. Listing Decision Packages Under Each Decision Unit


4.1 Under each decision unit, there may be a number of decision packages
either in the form of subjects or projects.

4.2 Each subject or project would have a unique title. For example, assume
that the Deputy Director of AH&VS of a District is a decision unit. Under
this decision unit there may be the following decision packages:



  • Sheep rearing

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