CHAPTEROUTLINE

Aulhorily

D e f i n i t i o n
of
and
Meaning
5.1 Authority

Sources
of R e s p o n s i h i n y

5.2 Definition
of Responsibilty

and and
Meanng Authority
5.3 b e t w e e n
A c c o u n t a b i l i t y

and
A c c o u n t a b i l i l y

D i f t e r e n c e

5.4 Definition
of R e s p o n s i b i l i t y

and
Authorily,
5.5 Meaning b e t w e e n Aulhorily
I n t e r r e l a t i o n s h i p
of
Delegation
5.6 Definition
of
and Authorily
5.7 Meaning Delegation
of
of
Importance Authonity
5.8
Delegation
of
Elements
of
5.9
Delegation
of Authority
Obstacles in
5.10 of Authonity
Delegation
Principles
of D e c e n t r a l i s a t i o n

5.11 and of Authority

of
C e n t r a l i s a t i o n

and
D e c e n t r a l i s a t i o n

Question Bank
5.12 Meaning Delegation
between

5.13
Distinction
Exercises
Summary
AUTHORITY
DEFINITION
OF
AND decisions and to command

MEANING to take
f.1 the right
of an
individual
to enable
him to perir
'authority' implies entrusted to a person
The term ofrights and
powers power to orders and the
It is the sum right to give
subordinates. defined it as "the or ighttul poe
Henri Fayol has is the legal
the assigned tasks and O'Donnell,
"Authority
to com
to Koontz is the power
obedience. According job, authority
to the managerial
command or to
act. Applied of the authority /to hu
right to deemed by the possessor
act in a
manner
or not to
others, to act
or departmental purpose."
enterprise
following features of authority:
reveal the
These definitions
of an individual.
(a) It is the legitimate right
to command and
control others.
(b) It is the right
limits implied in the position e
It is bound by certain limits. In addition to the
(c) limits to his authoriy
individual, there are legal, social and biological
by an

needed to perform the As

(d) It is used to achieve organisational objectives. It is
and helps to ni
(e) Authority determines the superior-subordinate relationship
in the organisation.
thouthu
(1) Authority is the key to the manager's job. A person cannot be a manager
ha
some authority. In order to get things done through others, an individual i

68
 Authority 1s the supreme coordinating forcc. It binds
individuals working in the enterprise. togcther
Alegated by a imanager to his subordinates.
delegated
bC
can
rif erent from poWet. 'ower is thc capacity to influiencc others while
ht to intluence others. Power is personal while authority is associated
ilthu

i( Is t h e

sition or rank. Authority can be

h the oti
otlical position
declegated but power cannot be

aisation. authority ot a person depends on his

a tlh forn position. It is
highest
nd reduces successively dlown the chan
and
reduces
of command. Thus,
ihe to
lcvel

bottom.
authority
fvn (op to
us
Table 5.1 : Authority and Power-A Comparison

Authority Power
1. Ability to do
St
to do something
something
Daned trom o r g a n i s a t i o n 2. Derived from many
be 3. Flows
sourccs
personal
Alays fioWS doWward-can
in all
directions-cannot be
delegated
legated
nitnmale-resides in the position 4. May be
illegitimate
9syechvigunu
irrow
em -one source or subset of s. Broad conceptcan achieve results when drhen
authority fails
Visble from organisation chart. lt is 6. Not visible from organisation chart
2sntutionalised power.

5: 8OURCES OF AUTHORITY

SOURCES OF AUTHORITY

Formal Authority Theory

Acceptance Authority Theory Competence Authority Theory
FIg 5 5ourtes of Authorty
TtetTete 296/three sources from which derive his
authority.a
anager can
Authority Theory
According to this theory, authority originates at the top
:
Oganisation and flows downward through the process of delegation. The ultinate
O I authority in a compan tie th the shareholders due to the institutton ot
of pey. The shareholders entrust the management of the company to the Board
Ai r s and delegate most of their authority to it. The Board of Directors delegates
thority to the Chief
Executive who in turn delegates it to departmental heads. and
dela y manager in the organisation has only that much authority which has been
to him
the rganisation. by his supe
Therefore,
perior. He derives his authority from his formal position in
nyay be called the authority is known as formal authority. Such authority

/Acceptanceby Auttrahe
led
ditional and legitimate. It is legal and rational.
thority
the
Theory Formal authority has no significance unless it is
subordinates. The degree of effective authority possesscd by a manager
69
 subordinates to accept it, Th
is measured the willingness ot
by The right to
not the subordinates obey. The manager An use punshme
depends upon whether or to endure the n
decide

punishmcnt or q
secure acceptance. But the
subordinates may
According to Chester Barm
organisation rather than accept the order.
Barnard,
will accept an exercise of authority_il theadvantagesaccruingto him fro "An j

the disadvantages accruing to him from not accepling exceed the a CCCD
to him from not accepting plus the disadvantages aceruing
to him advantages a
from
from
lauwotc
A t , conversely, he will not accept an exercise of authority if the lattcr
atter factors
fo accepting,
acce excun
former." Thus, the positive and negative conscquences determine the
Cempnta Acloi, an order. Some orders may be fully acceptable, others partially accentlab
others fully unacceptable. Bamard suggests that a subordinate will accep a
understands it well, if he believes it is consistent with the organisational order
compatible with his personal interests and if he is able both
bot
mentally and jcctives
comply with it. physical
The acceptance theory of authority maintains that a manager has authorit..
obedience from the subordinates. But a manager is not able to know whethe
if
will be obeyed by his subordinates unless the order is carried qut or disohevea
Acceptance authority flows upwards from lower to upper levelk. by th
/Competence Authority Theory: According to this theory, an individual derives auu
from his personal competence and charisma. According to Urwick,
formal uthori
conferred by organisatioa, technical authority 1S
implicit in special knowledgc
whereas personal authority is conferred by superiority or popularity.
Thus, a person.
get his order accepted not because he is having any formal authority, but
his personal qualities. These qualities include technical because
competence and social pree
in the organisation. For example if a
person Is expert in a particular ficld of knowle
other people seek his guidance and follow his advice as if that were
an order.
in other social groups Simile
peopTC wth charisma have the same authority.
All the three theories have their
utility. Formal authority is basic to managerial
Acceptance authority and competence authority are the products of leadership. Th.
G u t t
o r n y
authority is generated from all sources

MEANING AND DEFINITION OF

RESPONSIBILITY
Responsibility means the obligation to perform the assigned lasks or duties to the best
abiTity. It also includes the obligation to use the_authority or of
and resources in the man
desired by the superior. According to Koontz and
O'Donnell, responsibility is the obligaton
a subordinate whom a duty has been
to
The main features of
assigned, to perform the duly.
responsibility are as follows:
(i) It is the
obligation of an
individual
(ii) It is the
obligation to
perform the assigned duties or tasks.
(ii) It arises from the
authority
given to an individual
(iv) It always flows from lower
levels to higher levcl4
Responsibility is always in relation to human beings as e

duty. Responsibility is of a person, not a machine. It non-living things cannot b rdi

to superior. Responsibility arises only when
a always flows upwards irom r a

duty has been assigned by

a a
subordinate. The essence
of responsibility is the obligation to complete the job or su e.
A o
eet

minimum level of performance.

au

Responsibility may be continuing obligation or confined the single

funct au
It is a personal obligation and it is absolute. i.e.. it
to
performance or aa
hility i f
obligation which a subordinate owes to his
can never be delegated.
Respo 2ting o
superior and he cannot reduceit Dy

70
 oliun ssigncd duty, Responsibiliy should be
the
a tht unitary which mcans an
sile to only one superior at a given time for a certain
duly or work
1 PERENCE BETWEEN BETWEEN AUTHORITY AND RESPONSIBILITY
utiuul h u fepeIIsibility
losely
msibility iare clo interrelated but they differ from cach other n the

Authority is the legal ighl ol the

superior to command his subordinales
tea sibility is the
obligit ion ot a subordinate to
perfom
w h l e icsponsibili

the duties assigncd t

hiS SUpeto
hun by
tlotity
2.uipin: Auth aises either lronna tornal contract or
from legal provisions I1
a puuticular posilion, d tends, therefore, to be 1
hed to

Mlsibility ises troN a

superOr subordinate
impersonalised. On the other
hand, n e s p s i b i l

from
relationship. When a subordinate
CvCs
s authority uthority hiS Superior, he becomes responsible to the latter. Responsibility
t c h e d to a partiCuar peSOn And il Is, therefore, personalised
ow of authority and resOsibility is shown in Fig. 5.2

Sales Manager

Branch Manager

Sales Officer
|
Salesmen

Fig. 5.2: Flow of Authority and Responsibility

S.Delegation: Authority can be delegated by a superior to his subordinate. But

Tesponsibility is absolute and can never be delegated. When a superior delegates his
athority to a subordinate, he continues to be responsible to his own superior.
4. Direction or o w : Authority always lows downwards, ie.. from a superior to his

Subordinate. But the flow of responsibility is upward. A subordinate is responsible for

his acts to his
supcrior.
ontinuity : Authority usually has a longer life than responsibility. Responsibility
BCnerally comes to an end after the assigned duty is perfored.
ermination : Authority may be terminated by a notice. Responsibility eannot, however,
be so teniinated.

DCspile 1he above differences, authority and responsibility are closely ntemelated. They
e the two whecls of the management cycle and management cannot be successful

unless both move

together.
EANING AND DEFINITION OF ACcOUNTABILITY
Nu lity memsertISWerabitity tor ie mal outcone. Wlien an indixiduul gets
u iGhis superior, he becomcs ohliged 0 renderan nccount of how he has used his
l ACcordiny to Melarland, "Accounlability is the obliyation of au ndividualte epor
y o his
superior about the work e Tas done To discharge he respousibility
71
ANN
GAND DEFINLLIDOLDELEeAHON OF AUTHORITY
n a t takes pliace WhCn i_ ninager assigns a part of his work to otlhers and
o la u t h e

om he
uhority to pertorn assigned lasks. The manager vho dclegales aulharTtY
ulbordmalecs
tcs Tesponsihle to pro
TespoI1SiHie Tor proper erloranee of the assigned lasks. /Thus, the
IVolves assigiing dulies, cntrusting authority nd imposing respeSibilty
n.tes. Some popular definition of delegalion are
given below.
Delegation
of
t o1s
authority merey mcans
kgalion of autho granling of authoriy to sulordinates to operale
ihin preserihed limius Theo Haimann
is delegaled when enlerprise discretion is vesled in a subordinate by a
The entire process of delegution involves the determination of results expected,
ugment of tasks, Iransfer of authority for accomplishment of these tasks, andexa tion
ther accomplishment.
of responsibiliiy Jor Koont; and O'Donnell
Dedegation is that part of lhe organising process by which an executive makes it possihle

ior others to share the work of carrying out the company's purpose. It also includes the
ocess of assigning dulics, responsibilities and authority to those who he expects will
pro
aid him in doing the work.
- D.E. McFarland

Delegation is the ability to get resulis through others. It is the dynamics ofmanagement.
it is the process a manager follows in dividing the work assigned to him so that he
performs that part which only he, because of his unique organisational placement, can
perform and so that he can effectively get others to help him with what remains.
- Louis A. Allen

Delegation takes place when one person gives another the right to perform work on his
behalf and in his name and the second person accepts a corresponding duty or obligation
to do what is required of him. D.S. Hiner

These definitions reveal the following important characteristics of delegation of authority.

(a) Delegation involves sharing of work and authority with others.A manager does not
pass on his entire work and authority to his subordinates. If he does so, his managerial
position becomes empty with no work and no authority. He always retains some authority
Which he exercises himself. He retains the authority to take important decisions and the

supervise and control the activities of his subordinates.

authority to
division of work. No
0Delcgation of authority is based on the elementary principle of
to him. He gets part of his
work carried
adger can perform the entire work assigned
subordnates is an essential aspect
Out by his subordinates. In fact, getting things done by
of a
manager's job.
c) a manager
Cgation done within certain limits. While delegating authority,
is always
Tines the limits within which subordinates can exercise their authority.
a
d) never means abdication of responsibility. After delegating authority.
on to the subordinates.
ma which he assigned has
remains responsible for the work He can, at any tme,
egation does not imply reduction in the authority of the superior.
take back or reduce the
delegated authority. in
that the subordinates
are using their author1ty
pnor exercises control to ensure
the proper manner.
himself has the authority.
(h)
pe
n s
Can
delegate authority only when he routine
elegation does not mea
ean avoiding decisions.
A manager delegates authority for
mallers.
SSO that he can concentrate on more important
 On the Part of the
Urganisation
tion:: The
The
following
lollowmg delects
defects
nay als obstruct delegation of n the
orpanisation
authority struct
structure
(a) Inadequate planming.
(h) Lack ol clear-cut
() Lack of unity of
authorily-1esponsibility relationships.
command
(d) Absence of ctlective control
mechanism.
INCIPLFS OF
DELEGATION OF
ation of authority cannot be
AUTHORITY
etfective unless certain
llowed in practice. While principles PRINCIPLES OF DELEGATION
delegating authority, a
manager should OF AUTHORITY
ve the following principles.
Púnctional Definition : Before
should define clearly the dclegating authority a manager
functions to be Functional Definition
subordinates. The objectives of each jobs, the performed by
in it and its activities involved
relationship with other jobs should be defined
Precisely. Delegation by Resuits Expected
Delegation by Results
Expected : Authority should be delegated
only after the results to be achieved by_ Parity between Authority and
decided. This will enable them to the_subordinates are
know by what standards their Responsibility
Hormance will be judged.
Parity between Authority and
Responsibility: There must
be Absoluteness of Responsibility
a
proper balance between authority and responsibility of
a subordinate. Responsibility without authority will make
a subordinate ineffective as he cannot
discharge his duties. Unity of Command
Similarly, authority without responsibility will make the
subordinate irresponsible. Therefore, authority and
responsibility
sbpuld be co-extensive.
4. Absoluteness of Well-Defined Limits of Authont
Responsibility: Responsibility cannotbe
delegated: No manager can avoid his responsibility by_delegating
his authority to subordinates. After delegating authority he
remams accountable for the activities of his subordinates. Authority Level Pnnciple
Similarly, the subordinates remain accountable to their superior
duties. HB. 5.S: Delegation of Authorit
gr Ahe perlormance of assigned
Unity of Command: At one time, a subordnate should receive conmand and be

77
 imate st
when
th.at tccisn 11ak
the tecister
ette
he lmuts ol bis aullanil :Ths i (Ctally the manager
P'iniple e l e g a t e e t

Iee nuthoss q l e e i s f s T h e subor hnates

thority nhnh
the eselt
tmke

al The delegat
a but a e the
lumpun1
ithotity
d e t e p . a f e d

tlhe subordtnas
theauthouI
to
e.dn n f e r s t . a n f a h i e

devsuIs
allhnod tv fake s
heal a d reteTTed red upw ard h
upu
he
e i c n e onl
nhen ane
t
he 1NC lec be "maintenas
be nade at
ll a
weould
whh vano levelprele
isions
tthe
uthonts
competence of indiuiduals
onll, authritt

ofAoont nd
(he
that
aeetsons n ilhn oyganisttronal
structure

delegaton q u n e s 1 the
uwanl
be n l e n d
y them and nor

CENTRALISATION AND
DECENTRALISATI
N
MEANING OF
5.12
AUIHORIIY decentral1satnon
re related to the concept of icg
del.

and
The concepts of ventralisationderentralisatiwn represcnt
the pattern of distnbution
on of a
Centralisation and
uthority levels.
at ditlerent
mong managers

Centralisation
cOISISTCnL Cun Or Concent
Centralsation ot authority ntes to ssteatIc and An organisthin
akung at top or higher levels ot management,
aumority tor decisiO1N absolute uthority tor makiny
alnust all
be centralised when top management ntans
all drisons
ln a centralised oTganisatOn, co

on the functioning of the oryanisation.

few manngers at the top level. In
such an onganisai i
matters are taken by one or a
to managers nniddle and
at lower levels, They have to denend
authority is delegated
instructon nd guidanee m their day-t0-day activities. lhe an N
management for e

show no initiativeand freedom un theur day-to-dav activties, The top managnt

denN

supervision and control over all the actin ities m the organusation.
For example. let us take the ease of a mediun size stationery manutacturing tim ix
along with his two sons manages the whole business. e has establishod separats ikpaN
tor production, purchasinng, stores, narketing and aceounts. Faeh department is ndr IN

ofa qualiticd manager. However, all decisions on of materials. praiuctin ot a

purehase
nd on ther narketing are nade by the owner and his sons. They also supenise th
of various departments. The anngers ot varius departments ae oqumN
decisions and instructions. This is how centralised organisation wOrks.
Decentralisation
DeeentraBisation of authority
all levels of
means
systemauic dispersal ot anthority m t
Y

management for luking deeisions and actons pp{

p r e sat the s
According lo louis Allen, decentralisation is "The
levclsall authority. exeept that which ean be systenut cttort f0ei
t be
decentralised when managers enereiSed at ceniral ponts.\norganis
dceisons ind actions
at middle and lower lecls ane
on matters relating to their
gINOn t
Tets the utlhority tor takin major decIsims and
respectine aneass ot
ot norThe p
Wot
1S C.
Top magOment also retains uthority tornuliting polciC
for o1 crall coti
78
 qeal fadhrority
rhatsiae t gtsmopaiy rar der
ta t 7
tetag tethex ate 1sk en y e
arketstya7age datu etsgth red 4 detie
2 datsbyt sr ardertasfng weth bes thesrity Horwev
t h e rerall prol ses rthe 19Tyatry whse
t y 1 hes 1s hrr9 etrdr aisse aato
tr aitatse41 are rte ters he, sheid ra he confused with iocato

f y ing bratc}hest fferentstse may be cemraised 9rmslarty

cottalincd rseT 1hagh all tsffces at kr.ated e uridong
t aisaften are tetattse terme So oganssatso a be conpletely
lrcd hey ct together and there s need for a balaice
ragic. tcti sn a deceniralsscd orgarnisation the top tmanagement retans
rali pealit devafI to csure coxrdinatson and control The degree of
tralisatio dificT from one organisation to another Accndng to Henr
h h goes toy incrcase the subordinate's role is deceritralisation everything
dcreave 11CCTitralisation

DISTNCTION BETWEEN DELEGATION AND DECENTRALISATION

d i t c r e n c e between delegation and decentra
. p

1, ature: bgation
1s the process of authority while decentralisation is the
oft devolution
is
i c h is achieved when authority is delegated at different levels. Delegation
take place without decentralisation
aue
detentralisation is the result. Delegation can
without delegation of authority
tdecentralisation is not possible
his immediate subordinates
Delegation of authority is confined to a manager and
by one individual to another. It takes
2. Scope:
unit. It refers to granting authority
inaork his subordinates and empowers
them to
shares his authority with
place when manager
a
them. On the other hand.
behalf in respect of the tasks assigned to
ecide and act on his in all functions
of authority at all levels and
derentralisation involves systematic
dispersal
to the lowest
level. Delegation creates
extension delegation of
e orgrisation. ft is relationship
an

individuals while decentralisation creates a

two d e c e n t r a l i s a t i o n is wider
ationship between Thus.
Oen tup rmanagernent
and the rest of the organisation.
delegation. and be
p e a n d consequence than
subordinate
to his
manager
take place from
a
when the fullest
possible
npletion : Delegation can only
d e c e n t r a l i s a t i o n is
completed
process. But
unpicte it
the lowest level.
is
elegation is made to done through others.
things
Delegation is a mcans of getting cannot do everything hmselt.
But
ncance
because a manager may mayor
management
an evential techniquc The top u
55 management. authornty but
is a philosophy of without delegation ot
r a l ' a t 1 o n
function essential teature of
cannot is an
organisation delegation
d t p t it. An Therefore,
matter of choice and
decentralisation.
is a
without decentralisation
to
42Tition
hand, of action
On other
Ireedom
greater
and mnanagement.
to provide
It is adopted is also necessary
lation
quickly. It
tackle problems
managcment.

of the top environment.

5T that they may changes in the
various levels
so
l and othercomplex Many
C ,
technological and managing.

t h
compctitive,
essential
feature of orpaIsing
C c n t r a h s a t i o n
is not an
decentralisation
of authosuy.
with litle
are operated
a 1 1 o n s
79
 S. Freedom of Action Ater delegnting aufhonty to his suhordtiatr

TCpularly nctIsCs supeiso) ancontrol n theirpertr

beiaviur and

adccentrabed onpanisaton, lower level maayeis cD|Oy grCafcr frccdo

111atcment dloes not e e i c i s e close suTVSIOn
and controf o n thetn Ihe
Withn th bioad ideincs and tarets laid down by the top nanaver..
WT nanagerTee
and Decentralisation
omparison betneen Delegation

Basis Delegation Decentralisation

Nature Delegation is a compulsory act as no Decentralisation 15 an
optiora.
111:1nager can perlorm all tasks on his decision at the disCTetion of the
OWN management

2. Purpose To reduce the burden of the manager To increase the role and autono
lower level managers

3. Scope Its scope is narTOW as it is confined Its scopeis wide as it invoh es

to a superior and his immediate extension of delegation to the iower

subordinate level of management

4. Status It is a process of shar1ng tasks and It is the result of the policy decisio
authority taken by the top managemen

5. Freedom of There is less freedom to take There is more freedom o action du

action decisions due to more control by the lesscontrol by the top managemen
superior