AUTHORITY

Concept of Authority
Authority is the legitimate right of the superior to command and require his subordinates to perform certain activities. It is the legitimate right to give orders and obeyed. Thus an exercise of authority involves superior subordinate relationship.

Definitions

Henry Fayol :- Authority is the right to give orders and power to exact obedience. Allen :- Authority is the sum of powers and rights entrusted to make possible the performance of the work delegated. Simon :- Authority is the power to make decisions which guide the actions of another. Koontz and ODonnell :- Authority is the power to command others to act or not to act in a manner deemed by the possessor of the authority to further enterprises or departmental purposes. Daris :- Authority is the right of decision and command.

Characteristics of Authority
1. Authority of a manager is his right given to him by his superior. A manager exercises this right by virtue of his formal position in the organization. 2. This right enables a manager to take decisions and regulate behavior of his subordinates. The right helps him to decide and command. 3. On account of this right, a manager is in a position to issue orders and ensure their compliance from the subordinates. 4. The right to command is legitimate in a sense that it is socially and ethically acceptable to all concerned.

Characteristics of Authority

Contd..

5. The authority of a person is not absolute as it is limited by several internal and external factors including willingness of subordinates to accept the rights of the manager. 6. Authority is objective but its use is subjective. The use of authority is determined by the personality factors of the person and people over whom it is exercised. 7. The purpose of use of authority is to influence the behavior of the subordinates in the right direction. 8. Authority is the key to the managers job as it enables him to carry out his functions like planning organizing etc. efficiently and effectively.

Level of organization The quantum of authority tends to decrease at successively lower levels in the management hierarchy. When every authority is delegated by a manager, he places certain limitations on the authority of his subordinates. People at higher level enjoy more authority than those at the lower levels. Legal Restriction The authority of a manager is to be exercised within the framework of law such as the companies act, the MRTP act, Articles of Association, Company Policies, rules, regulation , company politics, resolutions, agreements and ethical practices etc. also limits the authority of a manager significantly.

Limitation of Authority

Biological and Technological limits Biological and Technological conditions also put the limits on authority. The physical and mental capacity of a manger is limited. Climate , topography, market factors, technology etc. also tend to serve as limits of authority. Even the span of management also works as an important limitation of authority.

Limitation of Authority

Contd..

Authority of a manager is neither absolute nor unlimited but it is has social, political, legal etc. Limitations.

DELEGATION OF AUTHORITY and

DECENTRALIZATION

DELEGATION OF AUTHORITY A manager in an organization cannot do all the work necessary for the achievement of organizational objectives, so he has to assign some part of his work to his subordinates and give them necessary authority. This process of granting authority to subordinates and extracting responsibility from them is known as delegation of authority.

Delegation of authority is the formal mechanism by which the net work of authority relationship is established. Delegation is a process where by a superior divides his total work assignment between himself and subordinate managers or operative personnel in order to achieve both operative and management specialization. Delegation consists of granting authority or the right to decision making in certain defined areas and charging the subordinate with responsibility for carrying through an assigned task.

Definitions

Characteristics of Delegation of Authority

Delegation involves sharing of authority. As a manager never delegates his entire authority to subordinates. Generally, authority to take routine decisions and to administer policies is delegated while authority for policy decisions and overall control is retained by the manager. A manager cannot delegate the authority which he himself does not possess. Delegation may be general or specific. Under specific delegation the course of action is specified while under general delegation only objectives are specified. Delegation may be written or implied.

Characteristics of Delegation of Authority

Contd

Delegation defines limits within which subordinates can act independently. Subordinates have to exercises delegated authority according to the policies and rules of the organization. Delegation has dual characteristics. Through delegation subordinate receives authority from his superior, but at the same time, his superior still retains the authority. Terry describe it as It is something like imparting knowledge. You share with others who then possesses the knowledge but you still retain the knowledge too.

Characteristics of Delegation of Authority

Contd

Authority once delegated can be enhanced, reduced or withdrawn depending on the situation and requirement. For example , changes in the internal and external environment, such as changes in organization structure, policy, procedure, methods etc. may require change in the degree of delegation of authority. Delegation of authority is always to the position created through the process of organizing. An individual occupying position exercises the authority so long he holds the position. But when he moves from that position, the authority rests with the position and does not move with the person.

The process of delegation involves:

Determining the results expected from a position. Assigning tasks to the position. Delegating authority for accomplishing these tasks. Holding the person in that position responsible for the accomplishment of the tasks.

Line, Staff, and Functional Authority

Line authority is the relationship in which a superior exercises direct supervision over a subordinate. Staff relationship is advisory. Functional authority 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.

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4. 5. 6.

Attitudes of Superiors Love for Authority Lack of Receptiveness Lack of confidence in subordinates Lack of ability to direct Fear of competition Absence of controls

Difficulties in Delegation
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3.

4. 5.

Attitude of subordinates Lack of Self confidence Lack of information and Resources Lack of positive incentives Fear of criticism Dependence on Boss

Other obstacles In adequate planning, defective organizational structure, inefficient communication system, Unfavorable organizational climate etc.

Guide Lines for Effective Delegation

Define assignments and delegate an authority to achieve results expected. Put right man at a right job. Develop open lines of communication and provide necessary information and resources to subordinates to enable them to take proper decisions and implement them effectively. Establish proper control to assure that the authority delegated is properly used. Provide appropriate incentives to reward subordinates for successful assumption of authority. A work climate free from fear and frustration should be created.

Guide Lines for Effective Delegation

Contd..

Adhere to the principles of delegation while delegating the authority. Adopt policy of non interference. Promote teamwork through the atmosphere of mutual trust, confidence , healthy interpersonal relations before delegating authority to subordinates.

Overcoming Weak Delegation

1. Define assignments and delegate authority in light of results expected. 2. Select the person in light of the job to be done. 3. Maintain open lines of communication. 4. Establish proper controls. 5. Reward effective delegation and successful assumption of authority.

DECENTRALISATION

CENTRALISATION

Centralization of authority means concentration of decision making power at the top level, in few hands, of the organization. According to Allen Centralization is systematic and consistent reservation of authority at central points in an organization. Under centralization, all the actions at lower levels are subject to the approval of higher levels of authority.

Advantages of Centralization

To facilitate Personal Leadership. To maintain uniformity in policy and action. To provide integration. To handle emergencies. To reduce the cost of operations. To take advantage of recent developments.

Centralization tends to increase the burden of routine work on top executives so they cannot concentrate on more important functions such as planning, control etc. It hampers the development of lower level managers, as they cannot get an opportunity to exercise initiative and judgments. Excessive centralization results in higher costs and delay in decision making on account of over burdened top managers. Centralization creates problems of communication. Centralization fails to provide scope for specialization as the person has to look after many aspects of the organizations.

Limitations of Centralization

Allen :- Decentralization implies consistent and systematic efforts to delegate to the lowest levels all authority except that which can only be exercised at Central points. Decentralization is the tendency to disperse decisionmaking authority in an organized structure. Decentralization implies delegation of formal authority, the pushing of decision making down the chain of command. Decentralization is the tendency to delegate formal authority to the lower organizational units while centralization is exactly opposite of it. Hence it may be stated that, everything that goes to increase the importance of the role of a subordinate is decentralization, and everything that goes to reduce it is centralization.

DECENTRALIZATION

1. It reduces the burden of top management so that they can concentrate on other important functions like planning control etc. 2. It makes growth and diversification easy. Under decentralization each product line is treated as a separate division, hence it can respond quickly to the changes in demands of its special market. 3. It enables the organization to survive and grow under the conditions of keen competition. 4. It helps in promoting development of executives. Decentralization provides opportunity to subordinate to take decision and take initiative so as to acquire leadership qualities.

Advantages of Decentralization

5. Decentralization tends to promote initiative and creativity on the part of subordinates. It helps the organization to maintain stability and continuity effectively. 6. It improves motivation and morale of subordinates. As opportunity to take decisions is given to them, it helps in developing belongingness and satisfies the need of power, prestige, status and independence. When motivation and morale improves, productivity increases and healthy working relationship also develops. It helps in maximum utilization of talents of lower levels in the organization. 7. It results in effective supervision because lower level managers are given complete authority to make changes in work assignment, to take disciplinary action, to recommend promotions and even to change production schedule.

Advantages of Decentralization.

It results in effective supervision because lower level managers are given complete authority to make changes in work assignment, to take disciplinary action, to recommend promotions and even to change production schedule. Decentralization is useful in promoting effective control through comparative evaluation of performance and clearcut accountability of results. It promotes democratic management and flexibility of operations. Necessary changes can be quickly made without disturbing the organizational structure. It helps in saving time as all the paper work relating to the basic operations of business can be significantly reduced, work can be completed early without wasting time.

Advantages of Decentralization.

Disadvantages of Decentralization

Decentralization may create problems of co-ordination among different departments in the organization. Semi autonomous division may concentrate on their own goals at the cost of the organizational objectives. There may be loss effective control and it may lead to disintegration of the organization. There may be lack of uniformity as all the decentralized units may not follow uniform policies and procedures. Thus inconsistencies may arise in the activities of the organization. Decentralization may result into heavy overheads on account of higher administrative expenses, duplication of staff and facilities trained persons may not be fully utilized.

Disadvantages of Decentralization.

It is not suitable for small scale units as decentralization needs broad product lines which are not available in small scale units. Decentralization may restrict timely action during emergencies. Some of the organizational activities cannot be decentralized such as handling government authorities, trade union negotiations etc. Decentralization may not be possible due to external constraints, such as increase in competition, growing power of trade unions, government interventions, development of computerized information system, rising cost of executives etc tend to reduce decentralization in several cases.

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DELEGATION V/S DECENTRALIZATION Both are the closely related terms as both refer to the location of authority, but there is considerable difference between these two terms. Delegation is the process of devolution or delegation of authority while decentralization is the end result of it. The amount of delegation determines the degree of decentralization in an organization. Delegation takes place between a superior and a subordinate and is a complete process But decentralization involves dispersal of authority throughout the organization. Thus delegation is individualistic while decentralization is organization wide. Decentralization is the sum total of a pattern of delegations.

DELEGATION V/S DECENTRALIZATION... 3. Under delegation, control rests entirely with the superior but under decentralization operating control rests with the subordinates and the superior exercises only overall control. 4. Delegation is vital and most essential for carrying out the process of management, where sufficient authority is delegated to subordinates to get things done. But decentralization is optional philosophy or approach to management while delegation is compulsory technique of management. An organization can exist without decentralization but it cannot survive without delegation of authority.

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DELEGATION V/S DECENTRALIZATION... Thus, Decentralization is much wider in scope and consequence than delegation. Decentralization is not possible without delegation but there can be delegation without decentralization. As Koontz and ODonnell observe, Although Closely related to delegation of authority, Decentralization is a philosophy of organization and management, implying both selective dispersal and concentration of authority. It requires for more than simply handing over authority to subordinates. Decentralization is an extension of delegation. To the extent authority is not delegated, It is centralized.

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