1. PROJECT ON : “Authority Relationship”
RADHIKA GUPTA
32- MBA
2. Contents:
• Authority Relationships
• Types Of Authority
• Responsibility
• Authority
• Accountability
• Authority, Responsibility and Accountability are Inter-related
• Decentralization Of Authority
• Delegation Of Authority
• Recentralization Of Authority & Balance As The Key To Decentralization
• Corporate example
• Conclusion
• Biblography
3. 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.
4. Authority Relationships:
The organisation structure of a business enterprise consists of
three types of authority relationships:
• Line authority
• Staff authority
• Functional authority
5. Line authority:
Line refers to those positions & elements of the organisation ,
which have the responsibility & authority & are accountable
for accomplishment of primary objectives
• Line authority gives a supervisor a line of authority over a
subordinate
• Scalar principle in organization
• Example :
Production manager
Marketing manager
6. Staff authority:
• Staff refer to those elements which have responsibilty &
authority for providing advice & service to line in attainment
of objectives.
• The nature of staff relationship is advisory
• Staff elements facilitate the decision process by bringing in
expert & specialised knowledge
• Example :
Industrial engineer
Market research manager
Internal auditor
7. Types of staff:
Staff may be divided into the following three categories:
• Personal staff
• Specialised staff
• General staff
8. 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
9. Types Of Authority:
There are different types of authority:
• Positional authority
• Coercive authority (also referred as penalty authority)
• Expert authority
• Referent authority
• Reward authority
10. Responsibility :
• It means the work assigned to an individual
• It includes all the physical & mental activities to be performed
by the employees at a particular job position.
• The process of delegation begins when managers passes some
of his responsibility to his subordinates which means
responsibility can be delegated.
11. 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
12. Authority:
• The delegation of authority is the second step of organising
process.
• While sharing the authority managers keep in mind that the
authority matching to the responsibilty should only be
delegated.
13. Accountability :
• To make sure that the employees / subordinates perform their
responsibilities in their expected manner, the accountability is
created.
• It means subordinate will be answerable for the non –
completion of the task.
• It is the 3rd & final step of delegation process
14. 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.
15. Decentralization Of Authority :
• It emphasizes the dispersion of authority in the organization.
• 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.
• There cannot be absolute decentralization
16. Delegation Of Authority:
• All activities are not performed by one person.
• Authority is only delegated, not responsibilities.
• It is an art of management science.
• Delegation is the process of sharing power and work
17. Process Of Delegation:
It 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
18. Principles Of Delegation Of Authority
• Principle of parity of authority and responsibility
• Principle of absoluteness of responsibility
• Principle of unity of command
• Principle of functional definition of authority and
responsibility
• The scalar chain
19. 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.
20. 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 environment
21. 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
22. Corporate example :Empowerment at
the Ritz – Carlton hotel:
• 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
23. Conclusion:
Authority is the genesis of organisational framework. It is an
essential accompaniment of the job of the management. It is
one of the founding stones of formal & informal organisation.
A management will not be able to function efficently without
proper authority. An organisation cannot survive without
authority. Used appropriately , authority is a valuable tool for
any organisation.
24. Biblography:
• 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
