Types of authority in an organization
Formal authority
This is normally confined by the law or delegated within an organization based on the
organization structure. It has to be in writing and known to all managers or executives
and employees in an organization.
b) Line authority
This authority can be regarded as the main authority in an organization. It is the
ultimate authority to decide upon matters affecting others and it’s the main feature of
superior subordinate relationship.
Line authority is not absolute; it must be applied with discretion within the limits of
delegated authority and must relate to performance of jobs which leads to the
attainment of the objectives of the organization.
c) Staff authority
Its scope is very limited as there is no right to command. It is concerned with
assisting and advising and it is used where line authority becomes inadequate.
Specialized skills are used to direct or perform those activities which the line
managers cannot effectively perform.
Staff authority is subordinate to line authority and its purpose is to aid the activities
which are directed and controlled by line managers
d) Functional authority
This authority is also subordinate to line authority but in comparison with staff
authority, it conflicts upon the holder the right to command in matters relating to the
functions. It therefore has limited right to command and help the superior to delegate
authority to command to the specialist without bestowing full line authority.
Where organizations have a central head office and branches, functional authority is
often used e.g. The head office, Human resource director renders staff functions for
the whole company, but he usually exercises functional authority on human resource
matters in his relationship with branch human resource officer.
Delegation
It is the process whereby an individual or group transfers to some other individuals
or groups the duty of carrying out some particular action and at the same time taking
some particular decisions.
• It means, in effect and trusting some part of the work of management to
subordinates
• It is the process of vesting decision making discretion to subordinates by the
superiors
• Responsibility is not surrendered since no manager avoids ultimate
responsibility by delegating
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• The work is delegated and the superior holds the subordinates accountable.
The subordinate is responsible for doing the job and the superiors’
responsibility to see the job is done.
Elements/process of delegation
i. Assignment of duties to subordinates
ii. Granting authority to make commitments to the extent necessary to enable them
carryout those duties assigned
iii. Creating an obligation on the part of each subordinate; This enables satisfactory
performance of the job
Types of delegation
1. General/specific delegation
General delegation is where any person is granted authority to perform the various
functions his department or division but the exercise of authority by each subordinate
continues to be subject to an overall regulation and supervision by his subordinates.
Specific delegation is functional in character, subordinates are given different specific
functions to perform i.e. the production manager may delegate the authority for
production and the accounts officer may delegate authority for accounting matters.
2. Written/unwritten delegation
Written delegation is made by written orders/ instructions. Unwritten delegation is based
on customs, conventions, agreements, usage e.t.c.
3. Formal/informal delegation
Formal delegation of authority is laid down in the organization structure on an enterprise
e.g. the sales manager is assigned the responsibility and the accompanying authority to
maintain and promote sales.
Informal delegation occurs when employees perform certain duties not because these are
assigned to them but because they feel that they can perform their tasks better and in
time.
4. Downward, upward and sideward delegation
Downward delegation occurs where the superior assigns duties and delegates authority to
his immediate subordinates.
In upward delegation, a subordinate assigns some of his tasks to his immediate superior.
This is a rare kind of delegation.
In sideward delegation, a subordinate assigns some of his duties and tasks to another
subordinate of the same rank.
Guidelines to ensure effective delegation
1. Grant proper amount of authority
It means that responsibility should not be less than authority delegated. Enough authority
should always be delegated to achieve the desired results.
2. Make sure that authority is clearly stated.
Authority relationship should be clearly defined not only to the subordinates in question
but all others concerned as well.
3. Define the results expected
This will enable the subordinates to know by what standards their performance should be
charged
4. Consider the capability of the subordinates
Authority should be delegated to those who are competent and willing to accept
delegation. People should be selected in the right of the jobs to be done.
5. Follow unit of command and chain of command.
Every subordinate must at a time receive orders and be accountable to only one superior.
In delegating, it is also important to follow the chain of command where authority flows
from the highest manager to all the subordinates at all levels
6. Modify the authority whenever necessary
Managers should maintain flexibility attitude about what kind of and how much authority
to delegate. This is because the environment of the business is dynamic and authority
relationship needs to be altered from time to time
7. Develop a willingness to delegate
No organization can function without delegation, managers must be willing to let go and
let others make mistake if delegation is to work.
8. Develop effective communication
There should be a free flow of information between the superior and the subordinates.
This enables the superior to give clear instructions and the subordinates to seek necessary
clarification
9. Establish an effective control system
Manager should put controls in place to ensure that the authority delegated is used
properly. The superior should set the performance standards and evaluate subordinates
performance periodically and help them improve.
10. Appropriate incentives
Suitable financial incentives are provided to reward subordinates for the successful
assumption of authority.
11. Allocate sufficient resources
Why managers do not delegate
1. Feeling of superiority- a manager may have a feeling that his subordinates are not
capable enough to do any work without close supervision. He may therefore
concentrate all decision making in his hands.
2. Fear of exposure- if the manger is himself not competent to plan ahead, and decode
which tasks should he delegate to whom he may avoid delegation of authority
because doing so will expose him for what he is incompetent and as a disorganized
person
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3. Risk avoidance- the feeling of insecurity may be a major reason for reactance on the
part of the manager to delegate authority. Despite the delegation of authority, the
manager will continue to be accountable for the actions of subordinate and these
might deter him from running the risk of decision making to subordinates.
4. Feeling of indispensability- if a manager has inflated sense of his own worth, and
wants other s to realize his importance, he may delegate authority such that everyone
around him is dependent on him for decision making.
5. Habit pattern- if as a result of practice of close supervision, the manager has
developed personal contact with all aspects of work, he may avoid delegation of
authority so as to sustain the deep, seated habit pattern.
6. Loss of importance- a manager may feel that delegation of authority to subordinates
may lead to diminution of his authority and divest of the importance enjoyed by him
as the centre of whole authority.
Why do subordinates fear delegation
a) Fear of criticism
The subordinates’ reluctance to accept delegation of authority may be due to fear
of criticism of mistakes. They may have a fear that even the slightest mistake on
their part may lead to their dismissal from service
b) Insecurity
They consider it safe to carry out the decision handed down to them by the
superiors than to make decision themselves
c) Lack of self confidence
Sometime, the subordinates may avoid acceptance of delegation due to lack of
confidence in their capabilities to discharge new responsibilities
d) Inadequacy of information and resources
They may fear that delegation in their case will mean assignment of activities to
them without a matching authority over the relevant information to facilitate
decision, making or the necessary human and physical resources to carry out the
decision
e) Inadequate incentives
If delegation of authority is not accompanied by suitable incentives, subordinates
may not be motivated to accept it willingly
Advantages of delegation
a) Reduction of managerial work load-delegation reliefs the manager of the need to
attend to routine types of duties
b) Basis of effective functioning- it establishes a relationship through the
organization an d helps in achieving coordination of various activities
c) Benefit of specialized services-it enables the manager to benefit from specialized
knowledge and expertise of persons at lower levels
d) Efficient running of the branches- in the big organization, delegation can provide
key to smooth and efficiently running of the various branches of the business
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e) An aid to employee development- delegation enables employees of the business
to develop their capabilities to undertake new and more challenging jobs. It also
promotes job satisfaction and high employee motivation
f) An aid to expansion and diversification of the business- with the employees fully
trained in decision making in various areas of the business, it can confidently
undertake expansion and diversification of its activities
Decentralization
This is the process of transferring all the authority to all levels of management to
enhance efficiently in the performance of the task. According to Koonts and O
Donnel decentralization of authority is a fundamental phase of delegation.
According to Allen, decentralization is the systematic effort to delegate to the
lowest level of all the authority, except that which can only be exercised at the
top (central point).
Difference between delegation and decentralization
Delegation decentralization
It is an act/process it is the end results of
delegation and dispersion of
authority to various levels
It is vital to management its optional in the sense that
the top management favour a
deliberate policy \to work for
a general
dispersion of authority
It refers to the relationship between two it refers to the relationship
between
individuals i.e. a superior and his immediate top management and various
subordinate department and activities
in the enterprise
Control over a subordinate performance is exercised the power to control may be
by the superior who constitute the source of delegated to departments
concerned
delegation of authority.
Guidelines determining the degree of decentralization of authority
Decentralization is not just physical dispersion of activities. An enterprise, whose
activities and function are confined to a small area, may have a greater decentralization
than the ones whose activities and functions are distributed over a wider area.
The degree of decentralization in an enterprise is determined by the combination of the
following factors:
a) Competence of the personnel available
The competence and the capacity of subordinates or managers is an important
determinant of the degree of decentralization. When the managers of the enterprise are
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capable and experienced enough, to make important decisions decentralization could be
easier.
b) Size and complexity of the organization
The larger the enterprise the more the authority the central manager is forced to
delegate. With growth in size and complexity of the organization, decentralization is
necessary to ensure to ensure speed and accuracy of decision making and flexibility
of the operations.
c) History of the organization
A firm is likely to have a very centralized structure if it has grown primarily from
may be personal leadership
d) Adequacy of communication system
Managers may seek to avoid decentralization through the development of a good
communication system that provides for speed, accuracy and capacity of information
needed for top management to exercise centralized control.
e) Dispersion of the organization
Geographical dispersion of the organization tends to result in greater decentralization
of authority.
f) Uniformity of policies
The greater the need for uniformity of policies the greater will be the degree of
centralization
g) Environmental influences i.e. tax policies, action of competitors, economic
forces, government policies, technology, customers’ e.t.c.
h) Philosophy of the top management
The attitude of the top managers has an important bearing on the degree of
decentralization
i) Business dynamics
j) Desire for independence
k) Control techniques
The degree of decentralization tend to be greater where an effective control system is
not available
Advantages of decentralization
i. It can contribute to staff motivation by enabling the middle and junior staff to get
a test of responsibility and encouraging the use of initiative by all employees
ii. It encourages decision making and assumption of authority and responsibilities
iii. It results in the principles of democratic management
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iv. It encourages smooth diversification of products and markets
v. It prevents the top management overload by freeing them from many operational
decisions enabling them to concentrate on their strategic responsibilities
vi. It speeds up operational decision making by enabling line units to take local
actions without reference back
vii. There is better communication
viii. It focuses attention into important matters of cost and profit centres within the
total organization these sharpens management awareness of cost effectiveness as
well as revenue targets
ix. It enables local management to be flexible in their approach to decisions, this is
after taking into account the local conditions and make decisions that are more
adaptable in situations of rapid change
Disadvantages of decentralization
i. It results into higher operational cost and duplication of resources
ii. It requires an adequate control and communication system if major errors of
judgment are to be avoided on the part of the operational management
iii. It requires greater coordination by senior management to ensure that individual
units within the organization are not working against the overall organization i.e.
need to control sub optimization
iv. It can lead to inconsistency of treatment of customers, clients or the public
especially in service industries
v. It requires plentiful supplies capable and well motivated managers who are able to
respond to the increased responsibility which decentralization brings about
vi. It may encourages a parochial attitude in subsidiary units, who may be inclined to
look more to their own needs then those of the colleagues in the organization
IV. Span of management/ span of control
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This refers to the number of the people or employees that a superior can
effectively supervise. It is the number of subordinates or employees reporting
directly to one person (a superior)
In practice, spans of management can vary between 1-40 or more subordinates
directly supervised, although the most likely range is between 3-20. Small spans
of management tend to be found among managerial, professional and technical
groups.
Factors affecting the span of management
i. Location – incase of geographically scattered operations, the span has to
be narrow because one executive cannot effectively manage the distinct
and distributed operations
ii. Competence of the superior – executives who are more capable can
supervise large number of subordinates than those who are less competent
iii. Caliber of subordinates – the more qualified and experienced
subordinates are, the lesser will e the pressure on the superior and the
wider the span of management
iv. Nature of work - in case of routine repetitive operations, span can be
wider since subordinates do not frequent guidance from the superior. In
case of specialized and frequently changing of duties, and those involving
constant interaction, the span of management has to be narrow
v. Level of authority – at higher levels of management, span of control is
generally narrow than at lower levels.
vi. Clarity of plans – the more clear and understandable the plans are, the
wide the span of management.
vii. Communication techniques – more effective is the communication,
lesser is the need for face to face contact and wider may be the span.
viii. Staff assistance – an executive can supervise more subordinates when
advice and assurance of the staff specialists is available to him
ix. System of control – span of management has to be narrower where the
control is exercised through personal supervision
V. Organization structure
This may be defined as the prescribed pattern of work related behaviors which
are deliberately established for the accomplishment of organizational
objectives. It serves as an instrument for the introduction of logical and
consistency relationship among the various decision function which made up
the organization.
Specialization and coordination are the key issue on the design of the
organization structure. Specialization relates to division of labour and use of
special purpose machines and equipment. Coordination means harmony in
operations to achieve organizational objectives
Organizational structure shows different position and responsibilities attached
to the post.
Types of organization structure
a) Line organization
b) Functional organization
c) Staff organization
d) Matrix organization
e) Project organization
f) Free form organization
g) Committee organization
h)
1) Committee organization
A committee is a group of persons constituted to deal with specific issues or
problems of organization. Committee can also be considered as formal groups
with a chairman on agenda and rules on conduct. Committee has specific tasks or
set of tasks to achieve. These tasks are made frequently although not always
associated with decision making.
As a formal group the formality of a committee is expressed by the following
features:
a) A chairman or chairperson who is responsible in ensuring
1) That the committee is conducted in accordance with the rule
2) The committee is supplied with necessary resources
3) A secretary who is responsible for taking the minutes of the meeting standing
out the agenda and other papers.
4) An agenda which is set out the agreed subject of matter of the meeting
5) The minutes of the meeting which are the official records of what has taken
place
6) Committee papers and reports which provides the committee with the quality
of information which will enable it to make usual informed decisions or
proposal
7) Rules of procedure which are designed to promote the smooth running of a
committee and ensure the consistency and fair play monitoring such rules
includes procedures for:
a) Speaking in a debate
b) Voting
c) Proposing a motion
d) Adding emergency to the operations of the committee as a communication
medium.
Types of committees
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i. Standing and adhoc committees
The standing committee which is always present in the organization
Adhoc committee is a temporary special purpose committee which is appointed to deal
with many specific problems or issues. It is disbanded and dissolved as soon as the
assignment given is completed
ii. Executive and advisory committee
An executive committee s one charged with the responsibility of making and executing
his decisions.
An advisory committee only remains as specific problem in all the details and makes
recommendations
iii. Line and staff committees
A line committee is responsible for controlling and coordinating a specific business
function having executive over the subordinate within a formal chain of command.
A staff committee only acts in advisory capacity having no authority in its decisions
iv. Formal and informal committees
A formal committee is constituted as per the organization policies and rules deriving its
authority from the same policies and rules
An informal committee is not consolidated as per the formal policies or rules of the
organization. It has no formal authority.
Advantages of a committee in an organization
1) Discussion of proposal are based on group assessment of facts and ideas are
not a very small grouped working in isolation
2) Committee can encourage the proofing of special knowledge and talent
possessed by individual members
3) Precisely because they are organized groups, committee can undertake a large
volume of work than individuals or vey smaller groups working in isolating
4) Committee are very useful in achieving coordination and collaboration
between worked groups
5) Committees acts as a vocal point for information and customs within the
organization
6) It’s a tool of managerial strategy i.e. the committee may serve as important
tool for delusion or consolidation of authority vested on a single individual or
postponing actions.
7) It is a tool of training and development of the employee
Limitations of committee organizations
a) Decision making is on hold together slower process when dominated by
committee
b) Committee works demand certain skills members who are unsure of
themselves unskilled in committee practice tend to leave the initiative to the
good committee members
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c) Committee sometimes have the tendency to be looked down in procedural
matters which reduce the time avoidable for the decision of substantive issues
d) Committee decision may often represent compromised solution rather than
optimum solution
e) Committee may represent the wishes of a certain group who one or more
influenced and not necessarily the riskiness of the members
