MBA

1. THE BUSINESS SCHOOL
UNIVERSITY OF JAMMU
REPORT ON - “Authority Relationship”
Submitted To : SUBMITTED BY:
Prof. Keshav Sharma RADHIKA GUPTA
ROLL NO – 32- Mba -14

2. 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.

3. 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.

4. Decentralizationof 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.

5. 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

6. 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 DelegationOfAuthority :
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.

7. 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.

8. 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:

9.  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.

10.  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.

11.  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 :

12. 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.
RecentralizationOf 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

13.  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.

14. Bibliography:
 Essential of management : An International & Leadership Perspective , 9th edition by
Harold Koontz & Heinz Weihrich , pg no – 194 - 206
 Essential of management : An International, 8th edition by Harold Koontz & Heinz
Weihrich , pg no – 179 - 191
 Principles Of Business Management , 2004, 1st edition by R.S Gupta , R.D Sharma, N.S
Bhalla, pg no – 10.1 – 13. 11
 Business studies : Principles & Function Of Management : part 1 textbook for class 12,
pg – 130 - 135
 Tony Eccles , “The Deceptive Allure Of Empowerment” in Arthur A. Thompson, Jr, A.J.
Strickland 3rd & Tracy Robertson Kramer , Readings in Stratergic Management , 5th
edition ,pg no -496 – 509
 Robert C. ford & Myron D. Fottler , “Empowerment : A Matter Of Degree” Academy Of
Management Executive , August 1995, pg – 21 – 25
 www.monitor.com/cgi-bin/iowa/ideas/?article=16,accesed May 30, 2002
 Alan Randolph , “Real Empowerment ? Manage the boundaries,’’ chap 8
 Harvard Management update , vol. 5, no. 7 (2000), pg 10
 Michael Schrage, “More Power To Whom ?” Fortune July 23, 2001 pg 270
 Vera Titunik, “ Plenty Of Power , Not A Man In Sight,’’ Fortune April 1 2002 pg 40
 Dean & Evans , Total quality chap 8
 Jeff Bailey, ‘‘Where The Action Is : Executive In Staff Jobs Seek Line Position ,”
 Wall street Journal, August 12 , 1986
 S. Caudron ‘‘Delegate For Results ,’’ Industry Week , February 6, 1995, pg- 27 – 28
 William C. Bogner , “Robert H. Waterman , Jr. On Being Smart & Lucky,’’Academy Of
Management Executive , Feburary 2002 , pg 45 – 50
 Ernest M. Von Simson , ‘‘ The Centrally Decentralized Is Organization’’ Harvard
business review , July – August 1990, pg – 158 to 162
 Kathleen Kane , ‘‘A Framework For Understanding Disempowerment In Organizations,’’
Human Resource Management, 1999

15.  Chris Argyris , ‘‘Empowerment : The Emperors New Clothes , Harward Business
Review , May – June 1998, p- 76ff.
 James W. Dean , Jr & James R. Evans, Total Quality Management , Organization &
Stratergy (Minneapolis/ St. Paul, MN: west publishing 1994
 Grabbing Project Management Authority – Building From Scratch Thomas Cutting,
October 3, 2008
 Ritankita Pathak Authority And Responsibility, Management, Principles Of
Management
 Meaning And Principle Of Delegation Of Authority Business Studies – XII
 Allen L.A – ‘‘Management & Organization’’ pg - 90