MEANING:

DELEGATION OF AUTHORITY IS ONE VITAL ORGANISATONAL PROCESS: It is inevitable along with the expansion & growth of a business enterprise. Delegation means assigning of certain responsibilities along with the necessary authority by a superior to his subordinate managers.Delegation does not mean surrender of authority by the higher level manager. It only means transfer of certain responsibilities to subordinates & giving them the necessary authority, which is necessary to discharge the responsibility properly.

DELEGATION IS NOT A PROCESS OF ABDICATION: The person who delegates does not divorce himself from the responsibility & authority with which he is entrusted. He remains accountable for the overall performance & also for the performance of his subordinates. Delegation is needed when the volume of the work to be done is in excess of an individual’s physical & mental capacity.

DEFINITION: According to F.C. MOORE, “Delegation means assigning work to the others & giving them the authority to do so.”

AUTHORITY

Authority is the power assigned to a manager. A manager will not be able to function efficiently without proper authority. Authority is the genesis of organizational framework. It is one of the founding stones of formal organizations. An organization cannot survive without authority.

According to Henry Fayol,” Authority is the right to give orders & the power to exact obedience.”

RESPONSIBILITY

Responsibility indicates the duty assigned to a position. The person holding the position has to perform the duty assigned. It is his responsibility. The term “responsibility” is often referred to as an obligation to perform a particular task assigned to a subordinate.

In the words of Theo Haimann, “Responsibility is the obligation of a subordinate to perform the duty as require by his superior.”

ACCOUNTABILITY

Every employee/manager is accountable for the job assigned to him. He is supposed to complete the job as per the expectation & inform his superior accordingly. Accountability is the liability created for the use of authority.

According to McFarland, accountability “is the obligation of an individual is report formally to his superior about the work he has done to discharge the responsibility.”

OBJECTIVES:

WHY DELEGATION IS NEEDED ?

1.TO REDUCE THE EXCESSIVE BURDEN ON THE SUPERIOR: Reduction of burden on the superior can be achieved by entrusting repetitive activities to one or more of his subordinates. In this way, delegation relieves the superior from some of his burden & allows him to utilize his time & talent for more important & urgent duties & responsibilities.

2.TO PROVIDE OPPORTUNITIES OF DEVELOPMENT TO JUNIOR EXECUTIVE: The junior executive can learn gradually the tasks, which his superior had been performing earlier. It will qualify him in course of time for the latter’s position when it fall vacant or when similar new jobs are created in the organization. Thus, delegation serves two purposes -viz.., it severs as an incentive to junior executive to accept greater responsibilities, to learn to do new task & in the process to develop the best of his potential. The process of delegation alone can create good managers

3.TO IMPROVE INDIVIDUAL AS WELL AS ORGANIZATIONAL EFFICIENCY: When a superior delegates one of his tasks which he has been performing efficiently but which he cannot do because of lack of time, the subordinate to whom it is delegated will not be able to do it with equal efficiency at the beginning. But if the subordinate selected has the ability & if he is trained

properly, he will learn quickly & will be able to do the job efficiently. Thus, delegation can help to raise the efficiency of the organisation as a whole.

PROCESS OF DELEGATION OF AUTHORITY

1.ASSIGNMENT OF DUTIES TO SUBORDINATES : The delegator has to decide precisely the duties, which are to be delegated to the subordinate. The subordinate is told what is expected from him. Competent & responsible employees are may be given general guidelines whereas less competent ones are given more specific guidelines.

2.TRANSFER OF AUTHORITY TO PERFORM THE DUTY : In the second stage of delegation process, the authority is transferred by the delegator to his subordinate (delegatee). Authority must be delegated only to perform the assigned duty. The performance suffers serious setback when required authority is not delegated along with the duty.

3.ACCEPTANCE OF THE ASSIGNMENT : In this third stage of delegation process, the delegatee has to accept or reject the task assigned to him in the first stage along with the authority given in the second stage. If he refuses, the delegator has to make fresh plan or may consider some other subordinate who is capable & is willing to accept the assignment. On the other hand, the process of delegation will move to next stage, if the first delegatee accepts the assignments of work accompanying the authority.

4.CREATION OF OBLIGATION: The fourth stage in the delegation is the creation of obligation on the part of the subordinate to perform duties assigned to him in a satisfactory manner by using the authority. When subordinate accepts a task & the authority is given, an obligation is created. He has to perform the assigned tasks by using the authority granted to him.

PRINCIPLES OF DELEGATION OF AUTHORITY

1.AUTHORITY SHOULD BE CO-EXISTENT WITH RESPONSIBILITY: This principle suggests that when authority is delegated, it should be commensurate with the responsibility of the subordinate. There should be proper balance between the authority & responsibility.

2.PRINCIPLE OF UNITY OF COMMAND : This principle suggests that everyone should have only one boss. A subordinate should get orders & instructions from one superior & should be made accountable to one person only. Unity of command also removes overlapping & duplicating of work.

3.THE SCALAR PRINCIPLE : This principle maintains that there should be clear & direct lines of authority in the organisation, running from the top to bottom. The subordinate should know who delegates authority to him & to whom he should contact for matter beyond for matters his authority.

4.PRINCIPLE OF FUNCTIONAL CLARITY : This principle suggests that, the activities are classified & grouped to create departments. The job positions, the result expected, the activities to be undertaken & the authority content should be made clear to the delegatee.

5.PRINCIPLE OF ABSOLUTENESS RESPONSIBILITY : This principle suggests that it is only the authority, which is delegated, & not the responsibility. The responsibility is absolute & remains with the superior. Even when the manager delegates authority to his subordinate, he remains fully accountable to his superior because responsibility cannot be divided. He is responsible for the acts & omissions of his subordinates.

6.USE OF EXECEPTION PRINCIPLE : This principle indicates that when authority is delegated, it is expected that the subordinate will exercise his own judgement & take the decisions within the purview of his authority. He is to be given adequate freedom to operate within his authority. He should refer the problems to the top-level management only when he is unable to take decisions.

7.PRINCIPLE OF COMPLETENESS OF DELEGATION : The principle of delegation suggests that there should be completeness in the process of delegation. The process of delegation should be taken to its logical end. Otherwise, there will be confusion of authority & accountability.

BARRIERS ON THE PART OF SUBORDINATE

1. TOO MUCH DEPENDENCE ON THE MANAGER : Some ordinates avoid responsibility even when the superior is prepared to delegate authority. A subordinate who is not confident about his ability will certainly try to shirk responsibility.

2. FEAR OF CRITICISM : Subordinates express unwillingness to accept

delegated authority because of the fear of criticism. They fear that they may be criticised by others if they commit mistakes.

3. LACK OF INFORMATION : A subordinate may hesitate

to accept a new assignment. When he knows that necessary

information to perform the job is not likely to be made available to him.

4. ABSENCE OF POSITIVE INCENTIVE : Positive incentives like recognition of work and rewards go a long way in building up the morale of subordinate. In the absence of such incentives, a subordinate may not be prepaid to accept delegation.

5. LACK OF SELF-CONFIDENCE : A subordinate may lack self-confidence to take quick & correct decisions. Thus, lack of self- Confidence is one obstacle in the delegation of authority.

6. DIFFICULTY IN DECISION-MAKING : A subordinate may not have the skill & the expertise to take quick & correct decision. He prefers to go to his superior & ask for the guidance. It acts as a cause for non-acceptance of delegation.

7.POOR SUPERIOR-SUBORDINATE RELATION : Absence of cordial relations between the superior & the subordinates hampers the process of delegation of authority.

8.UNDUE INTERFERENCE BY SUPERIOR : Some superiors interfere in the work of their subordinates. Here, the subordinates become uneasy & prefer to remain away from the process of delegation.

9.FEAR OF BEING EXPOSED : Some subordinates feel that they have limited capacity to accept the challenges, which are bound to come due to delegation. They feel that their inefficiency & inability will be exposed. This fear is an obstacle to delegation.

IMPORTANCE OF EFFECTIVE DELEGATION

It is necessary to give attention to the following points for effective delegation authority:

1. KNOWLEDGE OF WHAT TO DELEGATE & ALSO

WHAT NOT TO DELEGATE: If a manager tried performing duties which might better be delegated, he will find himself buried in details, performing the work of his subordinates. On the other hand, if he delegates authority, which he should exercise himself, he will find his position in danger & his subordinates will frequency comes in conflict with him & also with one another. To avoid this, a manager should delegate only routine function & reserve to himself the authority for making final decision.

2.DECIDE THE QUANTUM OF AUTHORITY TO BE DELEGATED: A theoretically correct answer to this question is that authority should be exactly equal to the responsibility delegated. If the delegated authority is in excess of responsibility, there is a danger that the subordinate may be tempted to misuse it. On the other hand, if a subordinate is assigned responsibility without adequate authority, he would be to unable to fulfill his responsibility & will feel frustrated. It is therefore necessary maintain a balance between authority & responsibility.

3. DEVELOP NECESSARY KNOWLEDGE & SKILL TO

DELEGATE: A superior should, while delegating make clear the extent of authority & responsibility given to subordinate. The subordinate should be asked to report back periodically

with completed work. This will give the superior an opportunity to judge the progress of the subordinate. If he finds that the subordinate is not likely to complete the task, he should give additional help for its completion.

CENTRALISATION AND DISANTRALISATION

1. CENTRALISATION

MEANING Centralisation refers to concentration of decision making authority in the hands of top management. Lower level personnel’s are asked only to implement the decisions taken by the top management. Basically, every organisation starts with centralized decision-making structure. With the growth of the organisation come a number of problems & challenges which centralization is not able to cope up with.

DEFINITION According to Louis Allen, “Centralisation is the systematic & consistent reservation of authority at central point within the organisation.”

FEATURES

1. USEFUL IN SMALL BUSINESS : A small sized business employs lesser number of people. Its activities are conducted on a limited scale. Here centralisation of authority is much more helpful & economical.

2.QUICK DECISION-MAKING : Decision making is quicker under centralisation because lesser number of people are associated with decision making process.

3.UNIFORMITY OF ACTION : Uniformity of action results in integration of activities of the enterprise. This may result in economies of scale & better bargaining power. Centralised purchasing function is an example of this.

4.FACILITATES LEADERSHIP : In the early stages of an enterprise & in a small firm, authority is centralized to facilitate personal leadership.

5.HANDLES EMERGENCIES: Cenralisation provides instant handling of emergencies because no consultations are required.

6.IMPROVES EFFICIENCY : Centralisation removes overlapping & duplication of work. At the same time wastage & inefficiency are eliminated & efficiency is improved.

7.CREATES SPECIALISATION : Centralisation provides outstanding results through specialization. Decision-making & control are exercised at higher level. Right man is put to the right job & performance improves.

ADVANTAGES

1.ECONOMICAL : Centralisation is economical as the activities & operations are integrated & the duplication of work & operating overheads are avoided.

2.PROMPT DECISIONS & ACTIONS : In centralisation, top-level management makes decisions. Consultation is not required. As a result, quick decisions & follow-up actions are possible.

3.PROMOTES UNIFORMITY OF ACTIONS : There are uniform rules & procedures. As a result, there is uniformity in the operations of departments, divisions, branches, etc.

4.LESS PAPERWORK : In centralisation, decision-making is quick direct & also there is personal involvement by the top management. Scrutiny of reports, correspondence, etc. is avoided. Naturally, paperwork involved is limited.

5.SUITABLE TO SMALL BUSINESS : Centralisation is convenient in the case of small business due to limited activities.

6.FACILITATES COORDINATION : Because of centralisation of authority, activities of a small business are well-co-ordinated.

DISADVANTAGES OF CENTRALISATION

1.RESTRICTS THE PROCESS OF DELEGATION : In centralisation, functions, duties & responsibilities are concentrated in the hands of few managers. This restricts the scope of delegation & decentralization which is harmful to large organization.

2.IMPOSES HEAVY BURDEN ON TOP EXECUTIVES : Due to centralisation, the decision-making power rests with few top executives. This puts heavy burden on top executives. They have to face mental tension & even their decisions may not be appropriate on all times.

3.SUBORDINATES SUFFER : In centralisation, limited authority is given to subordinates. They are like machines & have to act as per decisions taken at the top-level. The opportunity to learn, to accept new responsibilities & also of self-development is not given to them.

4.LIMITED DEDICATION & MOTIVATION : In centralisation, decisions are imposed on lower levels.

Subordinates work as per orders issued. There is no motivation to work hard. Centralisation kills initiative, self-reliance & motivation.

5.COMMUNICATION DIFFICULTIES : In the absence of efficient communication system, centralisation may lead to communication gap between higher & lower levels of management. This may lead to inefficiency, lack of management. This may lead to inefficiency, lack of coordination & confusion on the part of subordinates.

DECENTRALISATION

MEANING Decentralisation of authority means conscious/systematic effort to bring dispersal of decision-making power to the lower levels of the organization. Decentralisation is delegation not from one individual to another but delegation to all units in an organization. Decentralisation is the tendency to disperse decision-making authority in an organization.

DEFINITION

“Everything that goes to increase the importance of the subordinate’s role is decentralisation, everything that goes to reduce it is centralisation.”

- HENRY FAYOL

WHEN IS DECENTRALISION NEEDED?

1.Decentralisation is necessary in order to introduce democratic spirit in an organization.

2.Decentralisation is necessary along with the expansion of a business enterprise.

3.Decentralisation is necessary to enjoy advantages of better administration.

4.Decentralisation is needed as it facilitates the process of delegation of authority.

5.Decentralisation is a progressive & democratic concept

FACTORS AFFECTING DECENTRALISATION

1.PHILOSOPHY OF THE TOP MANAGEMENT : The philosophy of the top management as regards decentralisation is a key factor influencing the extent of decentralisation. Top management may not like interference in its authority. As a result, the scope for decentralisation will be reduced. If the top management believes in giving powers at lower levels, the extent of decentralisation will be more.

2. AVAILABILITY OF COMPETENT MANAGERS : Superiors will like to introduce decentralisation on a large scale if competent managers are available at the lower levels. The extent of decentralisation will be limited if there is shortage of competent managers at lower levels.

3.DESIRE FOR UNIFORMITY : The extent of decentralisation will be less when the uniformity in the policy is of critical

importance in running the enterprise. On the other hand, the extent of decentralisation will be more when uniformity in the policies is not expected.

4.SIZE OF THE ORGANISATION : If the size of the organisation is large, decentralisation is the only choice.

5.NATURE OF THE ENTERPRISE : Decentralisation is more common in the case of newly established as well as fast growing enterprises.

6.OPERATIONS OF AN ENTERPRISE : In some enterprises, the business activities may be conducted at different places & decisions are taken at different places. In this case, the extent of decentralisation will be more. Thus, dispersal of business operations leads to high degree of decentralisation.

7.HISTORY OF THE ORGANISATION : Many organisations grow in a gradual manner. They introduce decentralisation along with such expansion. Only the top management takes important policy decisions & the other decisions are taken at the level of departments, branches, plants & so on.

8.COST & IMPORTANCE INVOLVED IN DECISION : The top management usually takes the key policy decisions & the decisions, which involve heavy investment. Decisions, which are less costly, are delegated to lower levels. This means decentralisation is introduced.

9.INFLUENCE OF EXTERNAL FACTORS : External factors such as government controls, tax policies, licensing, etc. affect the degree of decentralisation.

DECENTRALISATION IS THE TENDENCY TO DISPERSE DECISION-MAKING AUTHORITY

1.RELIEF TO TOP EXECUTIVES : Concentration of authority overburdens the top executives with multiple duties. Because of pressure of work, top executives do not find time to look after basic functions like planning, controlling & coordination. The only alternative left is to reduce the load of duties by systematic decentralization of authority.

2.DEVELOPMENT OF MANAGERS : Decentralisation creates people who have mastered the techniques of professional

management not simply of supervision. Managers competent to independently bring up their units should be selected, trained & motivated to account for profitability. Decentralization will facilitate masterly planning & its execution by managers.

3.DEMOCRATIC APPROACH : Decentralisation is concerned with distribution of power among subordinates. Employees expected to do complete job come together & report to a common superior.

4.QUALITY DECISIONS : When more number of decisions are made at lower levels, management has to introduce decentralization. As there is limited consultation with superiors, the process of decision making is made speedier. This improves quality of decisions.

5.SIZE OF THE BUSINESS : When an organization is large & complex having capable managers, more decentralization is always preferable. With a fast & effective communication system, e.g. computerized management information system, there are decentralization tendencies. All these resulting into dispersal of decision making authority.GUIDELINES FOR EFFECTIVE/ SUCCESSFUL DELEGATION

1.DETERMINE OBJECTIVES : Before taking broad decisions

on delegation, the objectives of delegation should be clearly determined. As a first step, it is necessary to determine the goals expected to be achieved. Since objective are end conditions sought by performing the task, the subordinate knows what he is trying to accomplish.

2.PROVIDE INCENTIVES: Subordinates will accept delegation and take interest in the new duties assigned only

when they are properly motivated through suitable incentives. Such incentives may be appreciation of good work/promotion or monetary benefit.

3.MAINTAIN FAVOURABLE ATMOSPHERE: There should be favourable atmosphere in the organization for delegation. Mutual confidence, attitude of a cooperation & team spirit create such atmosphere.

4.ASSIGN DUTIES & GRANT COMMENSURATE AUTHORITY: It is important to determine all the duties that must be performed in order to complete the task at hand. Thereafter, the whole job should be assigned. Defining the job at the very start of a project brings proper perspective & the amount of authority needed to ensure parity of responsibility & authority.

5.SELECT COMPETENT SUBORDINATES : It is necessary to select most suitable subordinate for the job. The best subordinate for the job is the person who is properly qualified, trained & is willing to accept full responsibility for attaining stated objectives. If a choice must be made between two subordinates with one possessing the necessary skills & experience but unwilling to assume responsibility & for other short on experience but willing to assume responsibility, it is advisable to choose the latter.

6.DELEGATION IN RIGHT HANDS : Delegation of authority should be in right hands so that misuse of authority is avoided. For this purpose, selection of competent subordinates is of vital importance.

7.DELEGATION BASED ON LEARNING : The subordinate’s cannot become experts from day one. They should be allowed reasonable time to experiment & learn form mistakes. While delegating authority, the subordinates should be told that it is their training for future assignments.

8.RETAIN IMPORTANT TASKS : An important principle of delegation is to retain certain task, involving confidential information, by the manager himself. Matters involving department budget or personnel problems need not to be delegated, as they are delicate in nature. However, repetitive work should be delegated to the maximum possible extent.

9.DEVELOP PROPER MOTIVATION : Motivation of subordinates is essential for effective delegation Subordinates should be encouraged for self development so that they will have capacity to accept new duties & responsibilities. Promotions should be given when the delegatee proves his competence. Such motivation facilitates easy acceptance to delegated duties.

10. PROVIDES TRANING FACILITIES: Training develops skill, which are necessary for performing duties with confidence. Thus, should be provided so as to enable subordinates to handle their delegated jobs properly.

OBSTACLES/ BARRIERS ON THE PART OF MANAGER/SUPERIOR

1.UNWILLINGNESS OF MANAGER TO DELEGATE AUTHORITY: Some managers tend to think that they can do the job better when they themselves handle the jobs. The

attitude that “I can do it better myself “on the part of superior acts as an obstacle to delegation.

2.FEAR OF COMPETETION : A manager may feel that if he has a competent and if he delegates authority to subordinate, quite likely he will outshine him. Fear of subordinate’s excellence may come in the way on delegation.

3.LACK OF CONFIDENCE IN SUBORDINATES : A manager may hesitate to delegate, if he feels that his subordinate is not competent to deal with the problem and take decision. Fear of losing control over the subordinates and fear of being exposed due to personal shortcomings may acts as an obstacle in the process of delegation.

4.LACK OF ABILITY TO DIRECT : sometimes, a manager may experience difficulty in directing the efforts of his subordinates because of his incompetency.

5.ABCENCE OF CONTROLS THAT WORNS OF COMING TROUBLES: An organisation might not have developed the controlling techniques to know in advance the serious problems lying ahead. This may happen due to concentration of authority. As a result, manager may resist delegation.

6.CONSERVATIVE AND CAUTIOUS TEMPERAMENT OF THE MANAGER: If a manager has conservative and over-cautious approach, there will be psychological barrier in the way of delegation.

ADVANTAGES OF DELEGATION OF AUTHORITY

1.RELIEVES MANAGER FOR MORE CHALLENGING JOBS: Delegation makes it possible for the managers to distribute their work load to others. Thus, managers are relieved of routing work and they can concentrate on higher functions of management like planning, organizing, controlling, etc.

2.LEADS TO MOTIVATION OF SUBORDINATES : Subordinates are encouraged to give their best at work when they have authority with responsibility. They take more initiative and interest in the work and are also careful and cautious in their work. Delegation leads to motivation of employees and manpower development.

3.FACILITATES EFFICIENCY AND QUICK ACTIONS : Delegation saves time enabling the subordinates to deal with the problems promptly. They can take the decisions quickly within their authority. It is not necessary to go to the superiors for routine matters. This raises the overall efficiency in an organisation and offers better results in term of production, turnover, profit and so on.

4.IMPROVES MORALE OF EMPLOYEES : Delegation raises the morale of subordinates as they are given duties and supporting authority. They feel that they are responsible employees. The attitude and outlook of subordinates towards work assigned becomes more constructive.

5.IMPROVES TEAM SPIRIT : Due to delegation, effective communication develops between the superiors and subordinates. The subordinates are answerable to superiors and the superiors are responsible for the performance of subordinates. This brings better relations and team spirit among the superiors and subordinates.

6.PROVIDES CONTINUITY : An organisation requires its operations to go on continuously without any interruption. In the absence of the manager due to promotion, resignation, illness, leave, outstation business duties or for any other reason, the work does not suffer because delegation of authority ensures smooth conduct of business.

7.DEVELOPS CORDIAL RELATIONSHIPS : The superiors trust subordinates and gives them necessary authority. The subordinates accept their accountability and this develops cordial superior-subordinate relationships.

8.PERFORMS KEY ROLL : Delegation of authority is the key to organisation. Without delegation there would be no organisation. It will be only one-man rule.

9.FACILITATES MANAGEMENT DEVELOPMENT : Delegation acts as a training ground for management development. It gives opportunity to subordinates to learn, to grow and to develop new qualities and skills. It builds up a reservoir of executives, which can be used as and when require. Delegation creates managers and not mere messengers.