Authority and responsibility, delegation and decentralisation

1. Authority

Authority is the legitimate right to give orders, make decisions and use resources, and to require obedience. Fayol: “the right to give orders and the power to exact obedience”. It belongs to the position, not the person: when a manager leaves, the authority stays with the post.

Theories of the source of authority

• Formal (classical) theory — authority flows downward from the owners (in a company, the shareholders, through the board) to managers.
• Acceptance theory (Chester Barnard, The Functions of the Executive, 1938) — authority exists only when subordinates accept it; an order that is not obeyed carries no real authority.
• Competence theory — authority comes from knowledge and skill; people follow an expert whatever his position.

Limits

Authority is limited by law (a manager cannot order an unlawful act), by the memorandum and articles and board resolutions, by the policies of the organisation, by physical and biological limits, and by social and economic conditions.

Power is wider than authority: it is the ability to influence, whether or not there is a legitimate right. French and Raven classified five bases of power: legitimate, reward, coercive, expert and referent.

2. Responsibility and accountability

Responsibility is the obligation of a subordinate to perform the duties assigned. Accountability is the obligation to answer to the superior for the results. Responsibility arises from the superior-subordinate relationship and flows upward, while authority flows downward.

• Parity: authority should equal responsibility. Authority without responsibility leads to misuse; responsibility without authority leads to frustration.
• Absoluteness: authority can be delegated, but responsibility cannot. The superior remains answerable to his own boss for what his subordinate does.

3. Delegation

Delegation is the entrustment of part of a manager’s work and authority to a subordinate, who becomes accountable for its performance. Louis Allen: delegation is “the dynamics of management; it is the process a manager follows in dividing the work assigned to him so that he performs that part which only he, because of his unique placement in the organisation, can perform effectively, and so that he can get others to help him with what remains”.

Elements (process)

1. Assignment of responsibility (duties) to the subordinate.
2. Grant of authority needed to carry them out.
3. Creation of accountability for results.

Principles of effective delegation

• Delegation by results expected: define the results before delegating.
• Parity of authority and responsibility.
• Absoluteness of responsibility.
• Unity of command: a subordinate should receive delegation from one superior.
• Authority-level principle: decisions within a subordinate’s authority should be made by him, not referred upward.
• Scalar principle: a clear line through which delegation runs.

Importance

It relieves the manager of routine work so that he can concentrate on planning; it speeds up decisions; it develops subordinates for higher posts; it raises morale; and it makes expansion of the organisation possible.

4. Barriers (difficulties) to delegation

On the part of the superior

• The “I can do it better myself” fallacy.
• Fear of losing power or of being outshone by a capable subordinate.
• Lack of confidence in subordinates.
• Inability to direct, or to define the results expected.
• Absence of controls that would warn him of trouble.
• Unwillingness to let subordinates make mistakes.

On the part of the subordinate

• Fear of criticism for mistakes.
• Lack of self-confidence or of information and resources.
• Already overloaded with work.
• No incentive for taking on extra responsibility.
• Easier to ask the boss than to decide.

Organisational: unclear authority relationships, absence of policies, and a culture that punishes error.

Overcoming them: define duties and results clearly; select and train subordinates; set up controls and open communication; give incentives; tolerate honest mistakes; and delegate gradually.

5. Decentralisation

Decentralisation is the systematic delegation of authority to the lowest levels where decisions can be made competently, with only those matters that must be decided centrally kept at the top. Louis Allen: “Decentralisation refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central points.”

Factors determining the degree of decentralisation

1. Size of the organisation: the larger, the more decentralised.
2. Cost and importance of the decision: costly decisions stay at the top.
3. Need for uniform policy: where uniformity matters (pricing, wages), the decision is centralised.
4. History and culture: a firm that grew by acquisition tends to stay decentralised.
5. Management philosophy of the top.
6. Availability of competent managers at lower levels.
7. Control techniques: good controls make decentralisation safe.
8. Geographical dispersion of operations.
9. Environment: government regulation and union bargaining at national level favour centralisation.

Merits and demerits

Merits: relief to top management, quicker decisions on the spot, development of managers, better motivation, easier control of performance by divisions. Demerits: costly (each division needs its own specialists), difficulty of co-ordination, risk of divisions pursuing their own goals, need for capable managers.

6. Delegation and decentralisation compared

How this is examined

“Define delegation. Discuss the various barriers to delegation” (January 2025, 10 marks), “barriers to delegation” (June 2025, 6 marks) and “difficulties of delegation” (April 2023, 6 marks); “factors determining the degree of decentralisation” (April 2023, 10 marks); “authority and responsibility” (June 2025) and “a note on authority” (August 2024) as short notes.

For the barriers, divide them into superior, subordinate and organisational, and end with the remedies. For the authority note, give Fayol’s definition, the three theories and the parity principle.