Authority

It is the right to take action, utilise organisational resources and exact obedience from subordinates. It is the capacity of a superior to make decisions affecting the behaviour of subordinates. Authority is the key to the management job. An organisational structure must be supported by proper authority relationships.

Features of authority
It is institutionalised power. It enables a position holder to regulate the behaviour of his subordinates in a legitimate manner It is the right to give orders and obtain obedience. He has the right to enforce decisions also. It is positional and with change in position the authority of individuals also change It is a relationship between 2 people the superior and subordinate. It flows from top to bottom It seeks compliance and if authority is disobeyed, subordinates may be penalised Authority is linked with the objectives of the organisation and is used to achieve organisational goals

Limits of authority
There are certain limits on a managers authority. The scope of authority at top level is more than lower level Factors affecting limits of authority External Factor Government rules & regulations, collective bargaining and agreements dealer, supplier and customer agreements social beliefs, codes, habits and customs Internal Factors Corporate by-laws organisational charts Budgets policies, rules and procedures position descriptions

Traditional authority- is based on social order Charismatic authority-based on reputation, personal qualities Technical authority-based on technical competence and expertise Legal authority- based on formal struture of organisation External authority- this comes from sources outside the organisation Informal authority- this is acquired due to position and not formally defined. Line authority- direct command of superiors over subordinates Staff authority- this is advisory in nature Functional authority- line authority given to functional experts Official authority- this is positional authority and is well defined

Types of authority

Power
It is the ability to exert influence i.e. the ability to change the attitudes and or behaviour of individual or groups. Relationship between power and authority Authority is the formal power a person has in an organisation because of his position. One may possess authority but no power, possess no authority yet have power or possess both authority and power.

Authority but No power

Authority plus power

Power but No authority The ability but not the right to get other people to do things

The right but not the ability to get subordinates to do things

The right and ability to get subordinates to do things

Differences
Power Ability to affect and influence others Power is associated with leadership It is a broader concept as authority is a form of institutionalised power Power is a personal quality Authority Right to command and extract work Authority is associated with managership It is a narrower concept as a person with authority may remain powerless Authority is positional

Delegation of authority
Delegation The act of assigning formal authority and responsibility for completion of specific activities to a subordinate. The process by which a manager assigns a portion of his total work load to others Authority is delegated when a superior gives a subordinate discretion to make decisions.

Features of delegation
Two sided relationship- The superior must be willing to give up a portion of his authority and the subordinate must be prepared to shoulder the responsibility Act of trust-The superior must have the confidence on the subordinates as the work delegated has been done on the assumption that they possess the requisite application and dedication to duty Freedom to think and act-Delegation means freedom to make decisions, make some mistakes and use ones full capacities. Dependency of relationships- Dependency for continued support from seniors develops A challenging task- The manager has to simultaneously give and retain authority, he has to give freedom and also ascertain that it does not lead to clash. Forward looking principle- Opens a new chapter in superior subordinate relationships.

Prerequisites for delegation

Barriers to Delegation Some managers are simply too disorganised to delegate work effectively, even though they would benefit from doing so. Another barrier is the insecurity as to who is ultimately responsible for a specific task- manager or employee? The most basic prerequisites to effective delegation are personal attitudes like managers willingness to give employees freedom to accomplish delegated tasks, receptiveness, willingness to let go, willingness to allow mistakes by subordinates ,willingness to trust subordinates & willingness to establish and use Broad Controls A second prerequisite is open communication between managers and employees. Third prerequisite is the managers ability to analyze factors like organisations goals, the task requirements and the employees capabilities.

Process of delegation
Delegation is an elementary act of managing but poor or inept delegations can be a cause of managerial failures. The process of effective delegation involves Establish goals and decide which tasks can be delegated Define responsibility and authority and decide who should get the assignment Provide resources and training to carry out the delegated task. Motivate subordinates and delegate the assignment Be prepared for guidance or interference, if required Establish a feedback system to ensure adequate controls

Advantages of Delegation
By delegating to subordinates managers are more free to function with maximum effectiveness for their organisation as burden of responsibility is reduced, have more time for constructive review and can carry on activities or services requiring more expertise.

Delegation enables employees to accept accountability and exercise judgment and allows them to grow. This also improves their self confidence and willingness to take initiative
It leads to better decisions at times as employees closest to the action scene will have a clearer view of the facts Effective delegation speeds up decision making. Delay in taking decisions can be eliminated when employees are authorised to make the necessary decision on the spot. Delegation implies freedom of subordinates to which they respond by developing a constructive sense of responsibility. This improves behavioral climate in the organisation and paves way for improved job satisfaction and productivity

Delegation problems
Reluctance to delegate by superiors due to the belief that they can perform better themselves, lack of trust, reservation about subordinates getting more credit, difficulties in providing continuous guidance and apprehension on who will be blamed for mistakes Reluctance to accept delegation by subordinates as they feel it would be easier to ask the boss, fear of criticism, lack of information resources, feeling of being overburdened and lack of self confidence.

Centralisation
Centralisation The process of retaining power and authority in the hands of higher level managers. The power and authority is not delegated. It is the systematic and consistent reservation of authority at central points within the organisation. Control and decision making reside at the top levels of management. Centralisation is useful in case of small organisations to survive in a highly competitive market.

Reasons for Centralisation

Specialised skills, talent and technology are sometimes not affordable nor practical in multiple locations Decentralised locations mean increase in overhead and staff Recent improvements in communication technology facilitate the movement of money, information, communication etc from a central location.

Problems of centralisation
The managers are burdened with a lot of detailed and exhaustive work As organisations grow, decision making and communication process becomes slow Centralised power may be abused Fortune of organisation depends on the health and vitality of top management people Centralisation kills initiative and, self reliance and judgment of lower level personnel Inhibits development of operating personnel.

Decentralisation
The tendency to disperse decision making authority in an organised structure. It requires careful selection of which decisions to push down the organisation structure and which to hold near the top. Policy of decentralisation helps managers to use their discretion to handle the ever changing situation. Decentralisation is said to be greater when more important decisions are made at lower levels, when more functions are affected by decisions made at lower levels and checking of the decisions made at the lower level is minimal

Advantages of Decentralisation
It reduces load of an overburdened executive It brings decision making closer to the scene of action and leads to quicker decisions It facilitates diversification It gives individuals an opportunity to learn by taking decisions with more freedom It results in effective controls and performance measurements

Disadvantages of Decentralisation
This may lead to conflicts among various divisions or departments This leads to increase in overheads and staff Freedom of action may lead to diversity of decisions It requires training programmes that may be time consuming and expensive

Delegation vs Decentralisation
Delegation Decentralisation It means pushing authority It involves (i) Determining what down to subordinate authority to push down (ii) developing policies and rules to It is concerned with sharing of guide the subordinates (iii) either managerial or operating selecting controls for monitoring work between superiors and performance subordinates This can occur on an individual It is concerned exclusively with sharing of managerial work basis or on a limited scale i.e.decison making It is a process and decentralisation is the system. It is a managerial philosophy and embraces all areas of management.

Line Authority
Line Authority Managers with line authority are (i) directly responsible for achieving the organisational goals (ii) line authority can be represented by the standard chain of command starting with Board of Directors and extends down the various hierarchical level to the level where the basic activities are carried out (iii) It is a legitimate power. Line authority is identified in terms of the companys goals, and will differ with each organisation. (Eg a manufacturing co. may limit line functions to production & sales whereas a department store may consider purchase & sales deptt. as line activities.) A small organisation may have all line positions.

Staff Authority
Individuals with staff authority are those who (i) provide line managers advice and services through research, analysis, options development as well as help in policy development & implementation, monitoring, control, legal/financial matters, design/operation of data processing systems etc. (ii) This authority is mainly based on expert power. (iii) They are not classified in line positions As an organization expand over time, staff roles are often added to supplement line managers. There are 4 levels of staff authority (i) Voluntary consultation The line head may or may not consult him. The extent of his influence depends on his persuasive ability, status, technical ability etc. (ii) Compulsory consultation The line head has to consult with this level of staff head before taking any action. (iii) Concurring authority No action can be taken by the line head until staff head with concurring authority agrees to it. E.g. finished part will not move to the next production phase unless approved by quality control inspector, no contract may be signed with 3rd party until approved by legal expert (iv) Functional authority He can give direct orders to in other departments.

Functional Authority
It is a form of line authority given to functional experts over certain specialised activities. They have the right to issue directives on matters over which they do not have direct line authority otherwise. They can give direct orders to people in other departments outside his formal chain of command, instead of just making recommendations to them (e.g. personnel manager can have complete control over areas such as recruitment & training in all departments of an organisation besides their own)

Line Organisation
Authority flows in a direct line from superiors to subordinates and the flow is straight and vertical. Authority flows downwards and responsibility flows upward. All superiors enjoy line authority
Manager

Sales

Production

Finance

Foreman A

Foreman B

Foreman C

Workers

Workers

Workers

Line & Staff Organisation

In this type of organisation, line managers make decisions and staff personnel provide advice and support. Line authority has right to decide and right to direct. Staff elements provides service and is devoid of the right to command. He has authority of ideas only.
President

Purchasing

Personnel

Office

Legal

Sales

Production

Finance

Quality Control

maintenance

Supervisor

Supervisor

Supervisor

Supervisor

Line, Staff & Functional Organisation

Under this type of organisation identical functions of various departments are performed by a specialist from that functional department. E.g. Foreman in the production department, apart from his line head, the superintendent, may receive instructions from personnel manager, marketing manager etc .

CEO

Purchase Manager

Works Manager

Personnel Manager

Marketing Manager

Financial Manager

Suptt.

Suptt.

Suptt.

Foreman 1

Line & Staff Conflict

The line departments complain Staff people encroach upon their authority That staff advice, research or experimentation is academic and accomplish little results When project is unsuccessful line people are blames and when it is successful staff people receive credit Staff people tend to operate in term of their own specialty rather than in the interest of the organisation The staff department complain that Line people are ignorant, resist new ideas, fear change Line people distrust and also non cooperate Staff has limited authority to implement their advice, ideas etc. Line people receive preferential treatment in terms of benefits and facilities.