Within framework of the formal organisations, there are three basic organisational relationships :

o Authority is the right to order or command and is delegated from the superior to the subordinate to

discharge his responsibility.

• E.g., if the chief executive of plant assigns the production manager with the production of

particular types of goods and services, he should also grant him the authority to use raw materials,

money and machinery, hire workers, etc. to fulfill the production schedules prescribed as his duty.

o Responsibility means the work or duties assigned to a person by virtue of his position in the

organisation.

• E.g., if a project manager is responsible for the construction of a bridge, he has also the authority

to command his subordinates, procure the needed materials, procure personnel and seek

assistance from functional departments for the completion of the project.

o Accountability is the obligation to carry out responsibility and exercise authority in terms of

performance standards.

• A person cannot be held answerable for the acts not assigned to him by his superior.

VirtuosoCoder.in

Louis A. Allen defined authority as the sum of the powers and rights entrusted to make

possible the performance of the work assigned.

Features of managerial authority are as under :

o Authority is the right or power to command and control the subordinates.

o It is granted to a position (or manager) for the achievement of organisational objectives.

o The authority may be exercised through persuasion or sanctions. If the subordinate does not

obey, the superior has a right to take disciplinary action.

Kinds of authority : Louis A. Allen has classified authority into three categories :-

o Authority of knowledge

o Authority of position

o Legal authority

Sources of authority :

o The formal authority theory

o The acceptance theory

o The competence theoryVirtuosoCoder.in

Authority

• It is the right of a manager to command his

subordinates and use organisational

resources.

• It arises because of a formal position in the

organisation. Whosoever occupies a

position, has the right to command the

subordinates.

• It can be delegated to the subordinates.

• It always flows downward from a superior

to his subordinate.

Responsibility

• It denotes the duties or tasks assigned to a

subordinate by his boss.

• It arises from a superior subordinate

relationship. The subordinate is

accountable since he owes an explanation

to his superior for the performance of

duties assigned.

• Responsibility, i.e., obligation to account

for results, can’t be delegated.

• Accountability always moves in the

upward direction as the subordinate is

responsible to his superior.VirtuosoCoder.in

Delegation of authority : Delegation means devolution of authority an subordinates to make them

perform the assigned duties or tasks.

It is that part of the process of organisation by which managers make it possible for others to share

the work of accomplishing organisational objectives.

Three basic but major skills needed to be an effective delegator are:

o Trust – You must believe in the people you delegate to.

o Honesty - You must be honest with them in what your expectations are.

o Communication – You must clearly articulate what you need done.

There are four areas to delegating : Assess

o What tasks am I currently responsible for?

o What tasks should I delegate?

o Who is the most effective person to get this task done?

o What expectations will I have for the completion of this task?

o How will I know when the job is completed correctly? How will I evaluate

this person? VirtuosoCoder.in

Assign

• How will I select to whom I will delegate?

• How will I inform my expectations of the project to this person?

• Follow up with the individual and ask them to coordinate the task/project.

• Here are some suggestions on how to delegate work

o Take a show of hands

o Ask for volunteers

o Pass around a sign-up list

o Appoint someone

o Assign a task to a committee

Availability

• Make yourself available should the person have questions.

• Strengthen the lines of communication by reminding your peers that they can come to you

with any questions you may have.VirtuosoCoder.in

• If you do not have the answers to their questions, be sure to make your, members aware of

other people they can contact for assistance (e.g. club advisor, Student Organizations office,

etc.).

Affirm

• Follow through with your expectations.

• Praise when a job is well-done. Address mistakes in a proactive manner using constructive

criticism.

• Evaluate the process. Did the job get done? What can we do better in the future?

According to Douglas C. Basil, “Delegation consists of granting authority or the right to

decision making in certain defined areas and charging the subordinate with responsibility for

carrying through the assigned task.”

VirtuosoCoder.in

Here are some typical examples of when you should delegate a task :-

• When somebody else has more skills than you in a particular area.

• When an individual has approached you with willingness to help out on a specific project.

• When someone can develop themselves by taking on a challenging task.

• When you don't have the time to handle your other responsibilities effectively.

• When planning takes more time than implementing.

On the other hand, here are some situations where you may wish to not delegate a task :-

• When the person has a negative attitude about the task/project.

• When other people are too busy to complete the entire job.

• When the project requires responsibilities members are not capable of handling

• When you will have to change the attitude/behavior of that person

VirtuosoCoder.in

Roadblocks to delegation :-

• I can do it better myself.

• I can’t trust my committee workers.

• I don’t have time to involve others.

• I can’t delegate something I don’t know how to do myself.

• I can’t bring myself to delegating busy work.

• I can’t delegate to my friends.

• Everyone is already busy.

Why do people resist delegation?

• They don’t know how to do the task.

• They have a fear of criticism for mistakes.

• They lack confidence in their ability.

• They don’t understand what is wanted.

• They don’t have the time.

• They don’t like doing it.VirtuosoCoder.in

• Six Steps to Successful Delegation :-

• Clarify your goals and set priorities : You need to have set goals and to have prioritized different

projects. Be sure you know what needs to be done and how important it is.

• Decide what goals and projects can be done by others : Take a realistic appraisal of what you are

trying to accomplish. Keep those projects close to you that are of the highest priority.

• Select the right person : Match the demands and skills of a project to individual skills, interests,

and talents. If you need someone to produce a flyer, give the project to someone who knows

how to make them and who has an interest in them.

• Organize the tasks being delegated : Examine what tasks need to be done for a project to be

successful and make appropriate decisions regarding who is working on it, the type of equipment

that may be needed, finances, and facilities.

• Give clear instructions and request feedback : Review exactly what you are going to tell

someone to make sure there aren’t various interpretations that could cause confusion.

• Set deadlines and ask for reports : Tell people what the deadline for their project or

responsibility is. Make sure that everyone understands exactly what needs to be done for the

deadline.VirtuosoCoder.in

Formal Organisation• It is consciously created to achieve predetermined

objectives.

• It refers to the structure of well defined authority and

responsibility of relationships.

• They are well planned and created deliberately.

• Communication has to follow formal channels.

• It continues to exist even if some members leave it.

• It flows downward and it is delegated, i.e., it is

institutional.

• The managers who have formal authority provide

leadership to the workers.

• It does not take care of human sentiments.

• It follows a rigid structure of relationships.

• It has prescribed pattern of behaviour for its members.

Informal Organisation• It has no predetermined objectives. It is created

because of interaction among people in the formal

organisation.

• It refers to the personal relationships which develop

automatically when people work together.

• They are unplanned and originate automatically.

• There are no fixed patterns of communication.

• They can disintegrate if some members leave the

organisation.

• It flows downward, upward and horizontally, i.e., it is

personal.

• Informal leaders are not appointed, but chosen by the

group members.

• It reflects human aspects.

• It is loosely structure and is highly flexible in nature.

• It develops social norms of behaviour through mutual

consent.VirtuosoCoder.in

Reasons of formation of informal groups :

Problem created by informal groups :

Companionship Sense of identification

Source of Information

Job Satisfaction

Protection of Members

Outlet of Frustration

Negative attitude of informal leaders

Resistance to change Rumors

Role conflict

VirtuosoCoder.in

Decentralisation of authority : It means dispersal of decision-making power to the lower

levels of the organisation.

• Decentralisation means reservation of some authority (power to plan, organise, direct and

control) at the top level and delegation of authority to make decision at points as near as

possible to where actions take place

• Allen points out that the degree of decentralisation can be judged by three criteria :-

o What kind of authority is delegated?

o How far down in the organisation is it delegated?

o How consistently it is delegated?

• Earnest Dale has given four tests to measures the degree of decentralisation in an

organisation :-

o Number of decisions

o Importance of decisions

o Effect of decisions

o Checking of decisions VirtuosoCoder.in

• According to Henry Fayol, "Everything that goes to increase the importance of the

subordinate’s role is decentralisation, everything that goes to reduce it is centralisation.“

Advantages of Decentralization :-

o Reduces burden of top executives: -

• Decentralization of authority relieves top executives from operating details or routine work

so that they can concentrate on more important functions of policy-making, coor dination and

control.

• By delegating authority for operating decisions, top management can extend its leadership

over a giant enterprise

o Quick and better decisions:-

• Decentralization permits prompt and more accurate decisions because decisions are made by

those who are fully aware of the realities of the situation.

• Decisions can be made near the point of action without consulting higher levels and without

waiting for approval of top executives.

VirtuosoCoder.in

o Growth and diversification : -

• Decentralisation facilitates growth and diversification of products and markets.

• Under decentralisation, each product line is treated as a separate division so that it can

respond quickly to the changing demands of its special market.

o Better communication : -

• Decentralisation improves organizational communication and efficiency because there are

fewer levels of authority.

• The problems of red-tape and bureaucratic delays are reduced.

o Development of executives : -

• Decentralisation provides an opportunity to subordinate managers to take initiative and

acquire leadership qualities.

• Lower level executives learn to manage by exercising delegated authority. A reservoir of

promotable managers becomes available which simplifies management successions and helps

to ensure continuity of management.

• Decentralisation promotes initiative and creativity on the part of subordinates. VirtuosoCoder.in

o Improvement in motivation and morale : -

• Decentralisation improves the job satisfaction, motivation and morale of subordinates.

• Opportunity to make decisions provides sense of belonging and satisfies the needs for power, prestige,

status and independence.

• A climate of competition is generated.

• High motivation and morale help in improving productivity and working relationships.

• Better utilization of talents at lower levels can be made.

o Effective supervision and control : -

• Decentralisation results in effective supervision because managers at the lower levels have complete

authority to make changes in work assignment, to take disciplinary action, to recommend promotions and

to change production schedule.

• Decentralisation also promotes effective control through comparative evaluation of performance and

clear-cut accountability for results.

o Democratic management : -

• Decentralisation makes for democratic management and flexibility of operations.

• Necessary changes can be made without dislocating the entire structure.VirtuosoCoder.in

Disadvantages of decentralisation : -

o More cost—Decentralisation is costly because it encourages duplication of functions and

equipments. As it is costly, it cannot be adopted by small organisations

o No specialisation — Specialisation suffers in decentralisation because everyone becomes

jack-of-all-trades but master of none. So specialisation is affected.

o No uniform action — It becomes difficult to maintain uniformity in action because routine

and methods differ from organisation to organisation and department to department.

o No equitable distribution of work — It becomes difficult to distribute workload equitably

among different employees.

VirtuosoCoder.in

Delegation of Authority

• Delegation of authority means giving work to

others and giving them the authority to do this

work. Delegate means to hand over or give.

• Delegation is the cause of decentralisation.

• Delegation takes place from superior to

subordinate.

• Delegation is a narrow term because it only

involves individuals.

• In delegation, the ultimate responsibility lies

with the superior.

• Delegation is very essential for getting the work

done through others. Therefore, it is used by all

organisations.

Decentralisation of Authority

• In Decentralisation, the authority is distributed

to all the levels of management.

• Decentralisation is the effect (i.e. a result) of

delegation.

• Decentralisation take place from the top-level

management to the different departments.

• Decentralisation is wide because it involves all

the department of the organisation.

• In decentralisation, the ultimate responsibility

lies with the head of department (HOD).

• Decentralisation is optional. Therefore, it is not

used by all organisations. It is only used by large

organisations.

VirtuosoCoder.in

Delegation of Authority

• Delegation may be refused by

subordinates.

• After delegation, it is very easy to

withdraw (take back) the authority from

the subordinate.

• Delegation is a technique of getting things

done.

Decentralisation of Authority

• Decentralisation is mostly welcomed by

heads of department.

• After decentralisation, it is very difficult to

withdraw the authority from the

department.

• Decentralisation is a philosophy of

management.

VirtuosoCoder.in

Centralisation of authority :- Centralisation implies the concentration of authority at the top

level of the organisation.

• It is the process by which the activities of an organisation, particularly those regarding

planning and decision-making, become concentrated within a particular location and/or

group. Advantages of Centralization of Authority

• The various advantages of Centralisation of Authority are :

o Reduced cost—The standardised procedure and method helps in considerably reduction of

office cost. Office cost is reduced as it does not emphasizes on more specialists, and more

departmental machines and equipment.

o Uniformity in action — Uniformity in action is established throughout the organisation

because of central administrative control. The same executive supervises the work and same

type of office equipments are used which ensure uniform performance of activities.

o Improved quality of work—Improved quality of work is possible because of standardised

procedure, better supervision and use of improved- machinery.VirtuosoCoder.in

o Better co-ordination — Centrlisation facilitate better co ordination among various operations.

Direct control and supervision are facilitated which results in less likelihood of conflict of authority

and duplication of work.

Disadvantages of Centralization of Authority:

• Opponents attribute the following disadvantages against centralisation.

o Delay in work—Centralisation creates loss of man-hours and delay in performance of work

because of transmission of records from and to the central control room. Quick decision is not

possible which also results delay in office work.

o Remote control—Better supervision is not possible as the executives are under heavy pressure of

work. Slackness in work is developed in the absence of better control and supervision.

o No loyalty— In centralisation there is no subordinate's initiative in work because they are required

to do such works which they were asked for.

o No Secrecy—Secrecy is not possible in centralised set up organisation because here orders and

decisions flow from one place and are conveyed to all.

o No special attention—In centralisation no special attention is given to special work as all works are

done at one place. VirtuosoCoder.in