THE BUSINESS SCHOOL

UNIVERSITY OF JAMMUREPORT ON - “Authority Relationship”

Submitted To : SUBMITTED BY:

Prof. Keshav Sharma RADHIKA GUPTA

ROLL NO – 32- Mba -14

Authority Relationships:Authority, according to Fayol, is the principle that managers have the right to give orders

with the expectation of obedience.

Authority is something that is granted to people. Authority can be demanded, taken or usurped,

but in order for it to really work for the betterment,it is usually granted.

Where does authority come from?It comes from organizations via the title and position that is given.  It comes from others

(apart from title) based on them allowing you to lead and rule over them.  Some attempt to

demand authority, but it really is up to those around the person to either reinforce that

authority or to rebel against it.  We see this all the time in groups and team as they elect

leaders and also in in nations as the people elect rulers and governors over them.  The

negative side is despots and tyrants who extract obedience through oppressive means.

In today’s firms we hopefully do not see much tyrannical rule, but it happens sometimes on

a smaller scale.  Some person exercises overbearing and micromanaging efforts that annoy

and frustrate others.  They create domains for themselves that require some form of entry

fee (do it my way) in order to participate.

Authority, when properly expressed, works with a teams strengths to make things happen.

It does not become overbearing.  It is authority that is granted to the person the

team sees the benefit in leadership.

Who can give orders?CAD Managers have the right to give orders, but not like a ships captain who barks out

demands that may end in “walking the plank” if they are disobeyed.  They work positively

with others to make team progress.  There may be times when they need to enforce the

guidelines and when that happens there should be a reasonable expectation of compliance.

Those who gave the title and position should back up the CAD Managers authority and not

undermine it.  They should support the decisions made and seek compliance from those that

are working in CAD.  Many Project Managers that have not done this and actually encourage

their teams to break the rules because they personally do not agree with the guidelines.

This is not good and the CAD Managers superiors should assist in correcting this behavior.

Authority rests on the shoulders of the CAD Manager mainly because they have impressed

others with their skill, decision-making ability, and people skills.  They have authority

because they have earned it the opportunity and others have granted it to them.  Granted

authority that works best comes from individual followers who grant it to their leaders.

Line / Staff Concept & Functional Authority :Line authority gives a supervisor a line of authority over a subordinate . it exsist in all

organization as an uninterrupted scale or series of steps. Hence the scalar principle in

organization : the cleaner the line of authority from the ultimate management position in an

enterprise to every subordinate position , the cleaner will be the responsibility for decision

making & the more effective will be organizational communication. In many large enterprise, the

steps are long & complicated but even in the smallest, the very fact of organization introduces

the scalar principle. It therefore becomes apparent from the scalar principle that line authority is

that relationship in which a superior exercises direct supervision over a subordinate – an

authority relationship in a direct line or steps.

The nature of staff relationship is advisory. The function of people in a pure staff capacity is to

investigate , research & give advice to line managers.

Functional authority : It is the right 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 . One

can better understand functional authority by thinking of it as the small slice of the authority of

a line superiors. But numerous reasons – including a lack of specialized knowledge, a lack of

specialized knowledge, a lack of ability to supervise specified processes, & the danger of

diverse interpretations of policies – explain why these managers are ocassionally not allowed to

exercise this authority . In such cases , line managers are deprived of some authority , which is

delegated by their common superior to a staff specialist or to a manager in another department.

For eg : 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.

Decentralization of authority : It emphasizes the dispersion of authority in the

organization.

The Nature Of Decentralization :

Organizational authority is merely the discretion the discretion conferred on people to use their

judgement to make decision & issue instructions. Decentralization is the tendency to disperse

decision making authority in an organized structure. It is a fundamental aspect of delegation , to

the extent that authority that is delegated is decentarized. How much should authority be

concentrated in or dispersed throughout the organization ? There should be absolute

centralization of authority in one person , but that implies no subordinate managers & therefore

no structured organization . Some decentralization exsists in all organization. On the other

hand, there cannot be absolute decentralization , for , if all managers delegated all their authority,

there status of managers would cease, their positions would be eliminated , & there would again

be no organization.

Meaning and Principle of Delegation of Authority:

All activities are not performed by one person. Authority should be provided to the

subordinates too. Process of transferring authority and creation of responsibility between

superior and subordinates to accomplish a certain task is called delegation of authority. It can

take place without decentralization. It can be withdrawn by delegator at any time. It minimizes

the burden of managers of unit, departments or plant. Relationship is between superior and

immediate subordinates are indicated. It is technique of management used to get the things done

through others. It is confined to manager and subordinates. Authority is only delegated, not

responsibilities. Very important to management process Control remains in hand of superior who

supervise the activities of subordinates. It is an art of management science. When authority is not

given to subordinates there is no performance. Delegation is the process of sharing power and

work (deliver the power from one to another).

Authority is delegated when a superior gives a subordinate discretion to make decision . Clearly

superiors cannot delegate authority they donot have , whether they are board members,

president , vice president , or supervisors.

The process of delegation involves :

Determining the results expected from a position

Assigning task to the position

Delegation authority for accompalishing these tasks

Holding the person in that position responsible for accompalishment of tasks

In practice, it is impossible to split this process , since expecting a person to accomplish a goals

without giving him or her authority to achieve them is impractical, & is delegating authority

without giving him or her authority to achieve them is impractical, as is delegating authority

without knowing the end result to which it will be applied. Moreover, since the superior

responsibility cannot be delegated , a boss must hold subordinates responsible for completing the

assignments.

The Art Of Delegation :Most failure in effective delegation occur not because managers donot understand the nature &

principles of delegation but because they are unable to apply them . Delegation is, in a way , an

elementary act of managing. Yet studies almost invariably find that poor delegation is one of the

causes of managerial failures . Much of the reason lies in personal attitudes towards delegation .

Personal attitude toward delegation : Although charting an organisation & outlining

managerial goals & duties will help in making delegation decisions & knowledge of the

principles of delegation will furnish a basis for it, certain personal attitudes underlie real

delegation .

Receptiveness – An underlying attribute of managers who will delegate authority is a

willingness to give other people ideas a chance . Decision- making always involves some

discretion , & a subordinate’s decision is not likely to be exactly the one a superior would

have made. The manager who knows how to delegate must have minimum of the “NIH

(not invented here ) factor “ & must not only be able to welcome the ideas of others but

also help others come up with ideas & compliment on their ingenuity.

Willingness to let go – A manager who will effectively delegate authority must be

willing to release the right to make decisions to subordinates . A major fault of some

managers who move up the executive ladder is that they want to continue making

decisions for the positions they have left . Corporate presidents & vice presidents who

insists of confirming every purchase or approving the appointment of every labourer

donot realize that doing so takes their time & attention away from far more important

decisions .

Willingness to allow mistakes by subordinates – Although no responsible manager

would sit idly by & let a subordinate make mistake that might endanger the company or

the subordinates position in the company, continual checking on the subordinate to

ensure that no mistake are ever made will make true delegation impossible. Since

everyone makes mistakes, a subordinate must be allowed to make some , & their cost

must be considered an investment in personal development. Serious or repeated mistakes

can be largely avoided without nullifying delegation or hindering the development of a

subordinate .

Willingness to trust subordinates – superiors have no alternative to trusting their

subordinates , for delegation implies a trustful attitude between them . A superior should

either train subordinates or else select others who are either prepared to assume their

responsibility.

Willingness to establish & use broad controls – Since superiors cannot delegate

responsibility for performance , they shouldnot delegate authority unless they are willing

to find means of getting feedback, ie. of assuring themselves that the authority is being

used to support enterprise goals & plans.

Principles Of Delegation Of Authority :

1. Principle of parity of authority and responsibility- parity of authority and responsibility is

one of the important principles of delegation of authority. There is equality in assigned task and

power to do the work. Authority to the subordinates is given by the superior on the basis of

assigned task. So Authority to the subordinates is given nether more or less than the task

otherwise their can be improper utilization of authority and mismanagement of task.

2. Principle of absoluteness of responsibility- according to it, responsibility can’t be delegated.

Only authority can be delegated. The person who delegates authority is himself responsible for

his seniors.

3. Principle of unity of command- according to it, subordinates must be commanded by one

superior, they should take their task from one superior and should be accountable fro their

responsibility toward the superior level of operation

4. Principle of functional definition of authority and responsibility- as per this principle.

Duties and task assigned by the superior and the authority given to fulfill the task should be

clearly explained and decided. But this subordinates can know about the limit of one’s right,

duties and responsibility.

5. The scalar chain- according to it, authority flows from top to bottom. So that scalar chain is

the basis of relationship between the superior and subordinates. It emphasizes the relation

between superior and subordinates by which delegation will be easier.

Why Is Authority Important?Of the 14 principles, Fayol listed authority as number two. Though authority has a number of

literal meanings, authority, in a nutshell, is the ability to tell someone what to do. Fayol

agreed with the definition of authority, but added that along with authority came responsibility.

It is not enough that a manager has authority and can delegate to employees what they can and

can't do. He also must take responsibility for the choices he makes and the actions he takes.

Since authority can be a double-edged sword, Fayol believed that managers must be individuals

of strong moral character. They must be able to use their authority for the good of the

organization and in the best interest of the employees. Used appropriately, authority is a

valuable tool for any organization. Used inappropriately, and authority can bring about

organizational downfall.

Principle: Authority And Responsibility

Authority is the power to give orders and get it obeyed or in other words it is the power to

take decisions.

Responsibility means state of being accountable or answerable for any obligation, trust, debt

or something or in other words it means obligation to complete a job assigned on time and in

best way.

Authority and responsibility are closely related and this principle states that these two

must go hand in hand. It means that proper authority should be delegated to meet the

responsibilities.

A match should be there between these two because of two main reasons:--

Firstly, if a person is given some responsibility without sufficient authority he can’t

perform better, and also could not accomplish the desired goal.

Secondly, if there is excess authority being delegated to an individual without

matching responsibility then the delegated authority will be misused in one way or the

other.

This is an important and useful principle of management because if adequate authority

is not delegated to the employees they cannot discharge their duties with efficiency and

this in turn will hamper the achievement of the organizational goal. Sometimes the

relation between management and employees is also badly effected by non delegation

of proper authority.

Positive impacts of this principle:

  No misuse of authority.

  Helps to complete job effectively and efficiently.

  Individuals can be held accountable.

  Systematized and effective achievement of organizational objectives.

Consequences of violation of this principle:

Misuse of authority.

Responsibility can’t be discharged effectively.

No one can be held accountable.

Conflicts between management and employees.

Authority, Responsibility and Accountability In Management :

It is necessary to have brief understanding of three terms intimately connected with the concept

and process of delegation

These terms are: 1) Responsibility, 2) Authority, and 3) Accountability.

Authority:

Authority in management is the formal or legitimate authority specified in a character that gives

a project manager the authority to act in the name of the sponsoring executive or on behalf on

the organization. Authority is the right or power assigned to an executive or a manager in order

to achieve certain organizational objectives.

There are different types of authority:

Positional authority: refers to the project manager's authority enforced through the project

charter.

Coercive authority (also referred as penalty authority): refers to motivating staff by

punishment and is predicated on fear of losing status, positions, bonuses or jobs.

Expert authority: is earned if the team respects one's skills as a project manager or subject-

matter expert.

Referent authority: refers to the ability to influence others through charisma, personality, and

charm.

Reward authority: refers to positive reinforcement and the ability to award something of

value.

A manager will not be able to function efficiently without proper authority. Authority is

the genesis of organizational framework. It is an essential accompaniment of the job of

management.

Without authority, a manager ceases to be a manager, because he cannot get his policies

carried out through others.

Authority is one of the founding stones of formal and informal organisations. An

Organisation cannot survive without authority.

It indicates the right and power of making decisions, giving orders and instructions to

subordinates.

Authority is delegated from above but must be accepted from below i.e. by the

subordinates. In other words, authority flows downwards.

Responsibility :

Responsibility indicates the duty assigned to a position. The person holding the position has to

perform the duty assigned. It is his responsibility. The term responsibility is often referred to as

an obligation to perform a particular task assigned to a subordinate. In an organisation,

responsibility is the duty as per the guidelines issued.

According to Davis, "Responsibility is an obligation of individual to perform assigned duties to

the best of his ability under the direction of his executive leader." In the words of Theo Haimann,

"Responsibility is the obligation of a subordinate to perform the duty as required by his

superior".

McFarland defines responsibility as "the duties and activities assigned to a position or an

executive".

Characteristics of Responsibility:

The essence of responsibility is the obligation of a subordinate to perform the

duty assigned.

It always originates from the superior-subordinate relationship.

Normally, responsibility moves upwards, whereas authority flows downwards.

Responsibility is in the form of a continuing obligation.

Responsibility cannot be delegated.

The person accepting responsibility is accountable for the performance of assigned

duties.

It is hard to conceive responsibility without authority

Definitions of Authority :

According to Henri Fayol, "Authority is the right to give orders and the power to exact

obedience."

According to Mooney and Reily, "Authority is the principle at the root of Organisation

and so important that it is impossible to conceive of an Organisation at all unless some

person or persons are in a position to require action of others “

Accountability:

Every employee/manager is accountable for the job assigned to him. He is supposed to complete

the job as per the expectations and inform his superior accordingly. Accountability is the liability

created for the use of authority. It is the answerability for performance of the assigned duties.

Definition of Accountability:

According, to McFarland, "accountability is the obligation of an individual to report

formally to his superior about the work he has done to discharge the responsibility."

When authority is delegated to a subordinate, the person is accountable to the superior for

performance in relation to assigned duties. If the subordinate does a poor job, the superior

cannot evade the responsibility by stating that poor performance is the fault of the

subordinate. A superior is normally responsible for all actions of groups under his

supervision even if there are several layers down in the hierarchy. Simply stated,

accountability means that the subordinate should explain the factors responsible for non-

performance or lack of performance.

Authority, Responsibility and Accountability are Inter-related:

They need proper consideration while introducing delegation of authority within an

Organisation. In the process of delegation, the superior transfers his

duties/responsibilities to his subordinate and also give necessary authority for performing

the responsibilities assigned. At the same time, the superior is accountable for the

performance of his subordinate.

Authority and Responsibility :

The issue of commands followed by responsibility for their consequences. Authority means the

right of a superior to give enhance order to his subordinates; responsibility means obligation for

performance. This principle suggests that there must be parity between authority and

responsibility. They are co-existent and go together, and are two sides of the same coin.

Recentralization Of Authority & Balance As The Key To Decentralization :

At times, an enterprise can be said to recentralize authority – to centralize authority that was

once decentralized. Recentralization is normally not a complete reversal of decentralization , as

the authority delegation is not wholly withdrawn by the managers who made it. The process is a

centralization of authority over a certain type of activity or functions , wherever in the

organization it may be found. To avoid pitfalls, any program for decenralisation of authority

must take into consideration the advantages & limitations :

Advantages :

Relieves top management of some burden of decision making & forces upper level

managers to let go

Encourages decision making & assumptions of authority & responsibility

Gives managers more freedom & independence in decision making

Promotes establishment & use of broad controls that may increase motivation

Makes comparision of performance of different organizational units possible

Facilitates setting up of profit centres

Facilitates product diversification

Promotes development of general managers

Aids in adaption to fast changing ednvironment

Limitations:

Makes it more difficult to have a uniform policy

Increase complexity of coordination of decentralized organizational units

May result in loss of some control by upper level managers

May be limited by inadequate control techniques

May be constrained by inadequate planning & control systems

Can be limited by the lack of qualified managers

Involves considerable expenses for training managers

May be limited by external forces

May not be favoured by economies of scale of some organization

Corporate Example :

Empowerment at the Ritz – Carlton hotel: Customers are important & so are the employees .

Here, not only customers but also employees are treated with dignity & respect. Hotel empowers

the employees by authorising front desk staff to spend upto $2000 to serve customers & to

ensure satisfaction to their guest. Sales manager authority is even higher $ 5000. Employees are

encouraged to propose recommendation for quality improvement.

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