Concepts of Authority:

• The sum of the powers and rights entrusted to make possible the
performance of the work delegated.
• Authority is a right or obligation to act on behalf of a department,
agency, or jurisdiction.
 Classification of Authority :

 Authority of knowledge: possessed by the staff specialists appointed by

the company. e.g. Production Manager.

 Authority of position: Persons having authority by virtue of their position

in the organization. e.g. The CEO

 Legal authority: The authority which is entrusted to a person by the law

of the land. e.g.: a court of law as the authority to announce punishment.
 Sources of Authority :

 Formal Authority Theory: All authority originates in the form of

the formal structure of an organization.

 Acceptance Theory: This theory states that authority is the

power that is accepted by others. Formal authority is reduced to
nominal authority if it is not accepted by the subordinates.

 Competence Theory: The supporters of this view assert that an

individual derives authority because of his personal qualities
and technical competence. Many persons derive informal
authority because of their competence. e.g. a person possesses
expert knowledge in a particular subject people will go to him for
guidance in that matter even though he has got no formal authority.
 Functional authority
 Functional authority is the right which is delegated to an individual or
a department to control specified processes, practices, policies, or
other matters relating to activities undertaken by persons in other
departments.

 If the principle of unity of command were followed without exception,

authority over these activities would be exercised only by their line
superiors.

 Functional authority is not restricted to manager of a particular type

of department. It may be exercised by line, service, or staff department
heads, although more often by the latter two because service and staff
departments are usually composed of specialists whose knowledge
becomes the basis for functional controls.
Continue…
 But numerous reasons including a lack of special knowledge, a lack of
ability to supervise processes, and the danger of diverse
interpretation of policies explain why these managers are occasionally
not allowed to exercise this authority. In such cases, the line managers
are deprived of some authority.

 It is delegated by their common superior to a staff specialist or to a

manager in another department. For example, a company controller is
ordinarily given functional authority to prescribe the system of accounting
throughout the company, but this specialized authority is really a
delegation from the chief executive.
 Relationship
between Authority, Accountability and Responsibility
 Authority is the legal right of person or superior to command his subordinates
while accountability is the obligation of individual to carry out his duties as per
standards of performance.

 Authority flows from the superiors to subordinates in which orders and

instructions are given to subordinates to complete the task.

 It is only through authority, a manager exercises control. In a way through

exercising the control the superior is demanding accountability from subordinates.

 Example:- If the marketing manager directs the sales supervisor for 50 units of
sale to be undertaken in a month. If the above standards are not accomplished, it
is the marketing manager who will be accountable to the chief executive officer.
Therefore, we can say that authority flows from top to bottom and
responsibility flows from bottom to top.

 Accountability is a result of responsibility and responsibility is result of authority.

Therefore, for every authority an equal accountability is attached.
Differences between Authority and Responsibility
Authority Responsibility

It is the legal right of a person or a It is the obligation of subordinate to

superior to command his subordinates. perform the work assigned to him.

Authority is attached to the position of Responsibility arises out of superior-

a superior in concern. subordinate relationship in which
subordinate agrees to carry out duty
given to him.

Authority can be delegated by a Responsibility cannot be shifted and is

superior to a subordinate absolute

It flows from top to bottom. It flows from bottom to top.

 Delegation of Authority - Meaning,
Importance
 A manager alone cannot perform all the tasks assigned to him. In
order to meet the targets, the manager should delegate authority.
 Delegation of Authority means division of authority and powers
downwards to the subordinate.
 Delegation is about entrusting someone else to do parts of your
job.
 Delegation of authority can be defined as subdivision and sub-
allocation of powers to the subordinates in order to achieve
effective results.
Elements of Delegation:
Authority, Responsibility & Accountability

For achieving delegation, a manager has to work

in a system and has to perform following steps : -

 Assignment of tasks and duties

 Granting of authority
 Creating responsibility and accountability
 Principles of delegation
 Principle of result excepted- suggests that every manager before delegating the powers to
the subordinate should be able to clearly define the goals as well as results expected from
them.
 Principle of Parity of Authority and Responsibility- According to this principle, the
manager should keep a balance between authority and responsibility. Both of them should
go hand in hand.
 Principle of absolute responsibility- This says that the authority can be delegated but
responsibility cannot be delegated by managers to his subordinates which means
responsibility is fixed. The manager at every level, no matter what is his authority, is
always responsible to his superior for carrying out his task by delegating the powers. It
does not means that he can escape from his responsibility. He will always remain
responsible till the completion of task.
 Principle of Authority level- This principle suggests that a manager should exercise his
authority within the jurisdiction/framework given. The manager should be forced to
consult their superiors with those matters of which the authority is not given that means
before a manager takes any important decision, he should make sure that he has the
authority to do that on the other hand, subordinate should also not frequently go with
regards to their complaints as well as suggestions to their superior if they are not asked to
do. This principle emphasizes on the degree of authority and the level upto which it has to
be maintained.
 Steps for Effective Delegation of Authority
 Effective delegation is an essential managerial skill. Practical advice on how
to develop and motivate staff, build loyalty, and give and receive feedback
will increase your confidence and help you to become a skilled delegate.

 To develop a culture of high delegation, management should practice

following steps:-
1. Understand the nature of task
2. Review the task the manager is responsible for.
3. Differentiate the tasks that should be done by others
4. Analyze the skill and capabilities of the subordinates
5. Inform the subordinates the task to be performed
6. Determine what you will delegate
7. Clarify the results you want
8. Be sure to delegate the authority
9. Delegate to the right person.
10. Proper assignment of duties
Continue…..
11. Be sure the employee understands his authority
12. Encourage and motivate them to take up the assignments willfully.
13. Detail the authority related to job performance.
14. Granting authority to perform.
15. Sharing power.
16. Being flexible.
17. Cross check the sub-ordinates skill to follow the instruction
18. Give freedom and autonomy in task and performance.
19. Exchanges ideas, feelings and values.
20. Develop confidence and will to work as independent
21. Concurrent job monitoring and evaluation of subordinates
22. Clarification and removal of obstacles in functional level
23. Maintain open communication
24. Trust people to do well
25. Never give final responsibility
26. Create a climate of responsibility.
27. Establish a time limit
28. Obtain feedback from employees
29. Solicits feedback.
30. Establish a follow-up schedule
 Benefits of effective Delegation
 Good delegation saves you time, develops you people, grooms a successor, and
motivates. When managers streamline their workload, they increase the amount of
time available for essential managerial tasks. The staff feel motivated and more
confident, and stress level decrease across the workforce.
 Effective delegation can save you hundreds of hours of unnecessary work,
increase productivity and provide invaluable training to your associates and
employees.
 Effective delegation involves the stimulus of increased responsibility and can
provide a delegate with an enriched level of satisfaction as well as greater sense of
worth .
 Delegation is empowerment, and that is the main spring of better work.

Your staff will not develop unless they are given tasks that build their abilities,
experience, and confidence. They will perform best in a structured environment in
which every one is aware of delegated duties and responsibilities and each has the
necessary skills and resources to carry out tasks efficiently. Successful leaders
build high performing and profitable organizations through effective
delegation of authority and purposive use of their knowledge, experience
and insight towards the ultimate goal of business surplus generation.
 Centralization and Decentralization
 Centralization is said to be a process where the concentration of decision
making is in a few hands. All the important decision and actions at the lower
level, all subjects and actions at the lower level are subject to the approval of top
management.
 According to Allen, “Centralization” is the systematic and consistent
reservation of authority at central points in the organization.
 The implication of centralization can be :-
 Reservation of decision making power at top level.
 Reservation of operating authority with the middle level managers.
 Reservation of operation at lower level at the directions of the top level.
 Under centralization, the important and key decisions are taken by the top
management and the other levels are into implementations as per the directions
of top level. For example, in a business concern, the father & son being the
owners decide about the important matters and all the rest of functions like
product, finance, marketing, personnel, are carried out by the department heads
and they have to act as per instruction and orders of the two people. Therefore in
this case, decision making power remain in the hands of father & son.
Continue…..
 On the other hand, Decentralization is a systematic delegation of authority at
all levels of management and in all of the organization.

 In a decentralization concern, authority in retained by the top management for

taking major decisions and framing policies concerning the whole concern. Rest
of the authority may be delegated to the middle level and lower level of
management.

 The degree of centralization and decentralization will depend upon the amount
of authority delegated to the lowest level.

 According to Allen, “Decentralization refers to the systematic effort to

delegate to the lowest level of authority except that which can be controlled
and exercised at central points.