FLOW OF THE PRESENTATION

• Authority ….. 1

• Theories of Authority ….. 2

Classical theory
Acceptance theory

• Types of authority
Line ….. 5
Staff ….. 6
Distinction between Line and Staff authority ….. 7
Functional ….. 8

• Responsibility ….. 9
• Accountability ….. 9

• Delegation of Authority ….. 10

• Features of Delegation ….. 10

• Process of Delegation of Authority ….. 11

Assignment of Duties
Granting of Authority
Creation of Obligation

• References ….. 12
 AUTHORITY

 AUTHORITY is a form of power.

 AUTHORITY is legitimate power as it is based on the recognition of the

legitimacy of managers’ attempts to exert influence.

 AUTHORITY is defined as the legitimate right to give orders and get these orders
obeyed.

 AUTHORITY is a right that arises from the formal position of individuals or

groups within an organization.

 The exercise of AUTHORITY involves superior-subordinate relationship.

SCHOLARS DEFINE AUTHORITY AS…

 “Authority is the right to give orders and the power to exact obedience.”
-Henry Fayol

 “Authority is the official and legal right to command action by others and to
enforce compliance.”
-George R.Terry
 “Authority is the sum of the powers and rights entrusted to make possible the
performance of the work delegated.”
-Louis A. Allen

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 THEORIES OF AUTHORITY

TWO VIEWS OF FORMAL AUTHORITY

THE CLASSICAL VIEW THE ACCEPTANCE VIEW

Constitution guarantees
Manager issues
right to own property and
commands
control a business

Recipient considers
Manager issues acceptance
commands

Non
Acceptance
Commands compliance
obeyed

CLASSICAL VIEW OF AUTHORITY

 A classical view of authority is that authority originates at some very high level,
and then is lawfully passed down from level to level.

 In a corporate entity, shareholders may delegate authority to board of directors

which may delegate to the chief executives and the process goes on till the last
level of the organization. In other words, management has a right to give orders
and subordinates have an obligation to obey.

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 FEATURES OF THE CLASSICAL THEORY

 Authority is institutionalized power.

 A kind of right on managers.
 Authority ‘comes with the territory’.
 Authority flows from top to bottom.
 Authority implies the capacity to exact obedience.
 It is a normative theory.
 It is not fully descriptive.

ACCEPTANCE VIEW OF AUTHORITY

The Acceptance Theory of Authority states that managers only have as much
authority as employees allow them to have. The acceptance theory of authority
suggests that authority flows downward but depends on acceptance by the
subordinate.

According to Chester I. Barnard, a strong proponent of the acceptance view,

“the decision as to whether an order has authority or not lies with the persons to
whom it is addressed, and does not reside in ‘persons of authority’ or those who issue
orders.”

He maintains that authority will be accepted only under the following conditions:

 The subordinate can and does understand the communication.

 The subordinate sees the order as compatible with his or her personal interests.

 The subordinate believes that the order is consistent with the purpose of the
organization.

 The subordinate is mentally and physically able to comply with the order.

In addition to these conditions, Barnard has presented another concept “zone of

indifference”. The idea denotes that subordinates tend to set specific limits within
which they will respond willingly to the exercise of authority over them. The size of a
subordinate’s zone of indifference is related to the evaluation he makes of the
inducements to co-operate compared to the burdens and sacrifices involved.

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 RANGE OF ACCEPTABLE AUTHORITY

Threshold of
acceptable authority
UNACCEPTABLE ACCEPTABLE

A Person’s :
Understanding of the order
Understanding of organizational goals
Personal values and priorities
Communication capabilities and job
capabilities

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 TYPES OF AUTHORITY

TYPES OF AUTHORITY

LINE AUTHORITY FUNCTIONAL AUTHORITY

STAFF AUTHORITY

LINE AUTHORITY

 LINE authority is the authority of those managers who are directly responsible,
throughout the organization’s chain of command, for achieving organizational
goals.

 Koontz and Weihrich define the LINE authority as “that relationship in which a
superior exercise direct supervision over a subordinate.”

 LINE authority is represented by the standard chain of command, starting with the
board of directors and extending down through the various levels in the hierarchy
to the lowest level.

 LINE authority is based primarily on legitimate power.

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 STAFF AUTHORITY

 STAFF authority is the authority of those groups of individuals who provide line
managers with the advice and services.

 George R. Terry states “The word staff literally means a stick carried in the hand
for support. Hence, STAFF authority originally means authority used to support
line authority.”

 STAFF authority is based primarily on expert power.

 STAFF can offer line managers planning advice, can also assist and guide in
policy implementation, monitoring, and control.

 Staff can be classified into two types :

1. Personal Staff
2. Specialized Staff
Personal staff may be defined as those assistant positions which provide
advice and service to one manager in helping him to carry out his reserved
responsibilities. He assumes authority and responsibility for his superior and acts in
his stead when the latter is absent.
Specialized staff consists of those elements of the organization which
provide advice and service in specialized areas of work to the line and other staff
units. It has no authority over other elements.

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 BOARD OF DIRECTORS

SPECIAL
MANAGING DIRECTOR
ASSISTANT

PRODUCTION MARKETING FINANCE PERSONNEL

MANAGER MANAGER MANAGER MANAGER

MARKETING ADVERTISING
RESEARCH MANAGER
MANAGER

SALES SALES SALES SALES

MANAGER MANAGER MANAGER MANAGER
DIVISION I DIVISION II DIVISION III DIVISION IV

Line Authority
Staff Authority

DISTINCTION BETWEEN LINE AUTHORITY AND STAFF AUTHORITY

LINE AUTHORITY STAFF AUTHORITY

• Line authority is directly
responsible for
accomplishing the primary
objectives of the enterprise.
• Line connotes authority to
make decisions and to take
action.
• Line represents the authority
of man. It is the ultimate
authority to command.
• The function of line is to set
program and policy.
• Line is decision making
body.
• Staff authority helps the line
authority to work most
effectively for achieving the
main objectives of the
enterprise.
• Staff supplies relevant
information and facts for
taking best decisions.
• Staff represents the
authority of ideas. It has no
authority to command.
• The function of staff is to
help in the development of
program and policy.
• Staff is advisory body.

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 FUNCTIONAL AUTHORITY

 The authority of members of staff departments to control the activities of other

departments as they relate to specific staff responsibilities.

 In figure, the finance manager of Division A reports through the chain of

command to the general manger of Division A, but is also responsible to the vice
president for finance at the corporate level. This dotted- line relationship indicates
the functional authority of specialized staff in relation to the line managers.

 Functional authority is necessary in carrying out many organizational activities,

both to provide for a degree of uniformity and to allow unhindered application of
expertise. Thus, it is based on both legitimate and expert power.

 The skills required to manage functional authority relationships and the problems
arising from those relationships are similar to the skills required to manage dual-
boss relationships.

PRESIDENT

VICE PRESIDENT VICE PRESIDENT

Finance Production

GENERAL GENERAL GENERAL

MANAGER MANAGER MANAGER
Division A Division B Division C

PRODUCTION
MANAGER
MARKETING PERSONNEL
FINANCE
MANAGER MANAGER
MANAGER
MANAGER
Functional Authority

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 RESPONSIBILITY

 RESPONSIBILITY is the obligation to perform assigned activities.

 Terry has defined RESPONSIBILITY as “the obligation of an individual to carry

out assigned activities to the best of his ability.”

 RESPONSIBILITY is the self assumed commitment to handle a job to the best of

one’s ability.

 The source of RESPONSIBILITY lies within the individual.

 Since RESPONSIBILITY is an obligation that a person accepts, there is no way it

can be delegated or passed on to a subordinate.

ACCOUNTABILITY

 ACCOUNTABILITY refers to the management philosophy whereby individuals

are held liable, or accountable, for how well they use their authority and live up to
their responsibility of performing predetermined activities.

 Hurley defines ACCOUNTABILITY as “liability for reckoning of the

responsibilities received by delegation of authority.”

 Robbins states that “accountability establishes reliability for the proper discharge
of the duties delegated to the subordinate.”

 The concept of ACCOUNTABILITY implies that if an individual does not

perform predetermined activities, some type of penalty or punishment is
justifiable. Also some kind of reward will follow if predetermined activities are
performed well.

 ACCOUNTABILITY always flows upward.

 ACCOUNTABILITY is unitary in nature. That is to say, each individual is

accountable only to one superior for delegated authority and responsibility.

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 ACCOUNTABILITY as like responsibility cannot be delegated.

 Without responsibility, ACCOUNTABILITY cannot be fixed.

DELEGATION

 DELEGATION is the act or process of assignment of authority by the superior to

the subordinates for accomplishing the specific tasks.

 According to Louis A. Allen, “Delegation is the entrustment of responsibility and

authority to another and the creation of accountability for performance.”

FEATURES OF DELEGATION

 Delegation of authority is a process.

 It is sharing of authority and responsibility.

 It is goal-oriented or purposive.

 It is flexible in nature.

 Authority once delegated can be enhanced, reduced, or withdrawn depending on

the situation and requirement. For example, change in organization structure,
policy, procedure, methods, etc., may require change in the degree of delegation
of authority.

 Delegation of authority may be formal and informal, specific or general.

 Delegation of authority is always to the position created through the process of

organizing. The individual occupying a position may exercise the authority so
long as he holds the position. Therefore, the authority is recovered fully from the
individual when he moves from the particular position.

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 PROCESS OF DELEGATION OF AUTHORITY

PROCESS OF DELEGATION OF AUTHORITY

ASSIGNMENT OF DUTIES

GRANTING OF AUTHORITY

CREATION OF OBLIGATION

ASSIGNMENT OF DUTIES

 The distribution of work among the subordinates.

 Points to be considered by a superior while assigning the duties:

Nature of job.
Availability of subordinates.
Ability and skill of subordinates.
Results expected.
Effect of delegation on
organization structure.

 In other words, the subordinates to whom duties are assigned must be granted
adequate authority to carry the duties.

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 GRANTING OF AUTHORITY

 The granting of authority refers to make commitments, use resources and take
other actions necessary to perform the duties.

CREATION OF OBLIGATION

 Creating obligation refers to creating responsibility and accountability on the part

of subordinates for the satisfactory performance of their assigned duties or tasks.

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 REFERENCES

• Management, 5th edition, 2007 by James F. Stoner, R. Edward Freeman,

Daniel R. Gilbert, JR.

• Management by Certo and Certo.

• Principles and Practice of Management by L. M. Prasad.

• Organization Theory by V.S.P. Rao and P.S. Narayana.

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