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Authority Delegation and

Decentralization

B.B.A.LL.B., Class of 2024

Learning Objectives

This chapter will enable the reader to:

• Understand the concept of authority and its types besides observing how power is a
basis of formal authority.
• Note responsibility and its forms as a balancing concept of authority.
• Learn about delegation of authority and the ways to make it effective.
• Candidly understand decentralization of authority and differentiate it from
delegation.
• Gain awareness about empowerment and the ways to make it successful.

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Formal Authority
➢ Organizational authority is the formal right of the superior to
command his subordinates to perform a certain act and also obtain
obedience of this command.

➢ Henri Fayol defines authority as “the right to give orders and

power to exact obedience.”

➢ According to Herbert A. Simon, authority:

▪ enforces obedience to norms
▪ secures expertise in the making of decisions
▪ permits centralization of decision-making and coordination of
activity
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Source of Formal Authority

➢ Classical View: authority originates at the top in the formal

structure of an organization and then flows downward to
subordinates. Managers at each level of the organization derive
their authority from the managers at the higher level.

➢ Human Relations View: authority of a superior originates in the

willingness of his subordinates to accept it. The authority becomes
somewhat meaningless unless those affected accept it and
respond to it.

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Power
➢ Power is the ability or the available potential of a person to
influence or to cause another person to perform an act or to
change his behavior or attitude.

➢ French and Raven have suggested that there are five bases of
power possessed by an individual :
▪ Reward
▪ Coercion
▪ Referent
▪ Expert
▪ Legitimate
➢ Three additional types of power:
▪ Charismatic power
▪ Reflected power
▪ Emotional power
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Types of Power
Reward
Power-
French and Influencer
has ability
Raven, to give
researchers at reward
Legitimate
the University Expertise
Power-
Power: By
of Michigan, virtue of
Influencing
ability comes
identified five expert skills
Power: by the virtue
the influencer
bases — or Ability to of
has ability to
influence + culture/traditi
sources — of in fluence
Means to on/law
social power in obtain
compliance
1959:
Referent
Coercive
Power-
Power –
Influencer is
Influencer
being
has the
imitated/follo
ability to give
wed by the 6
punishment
other person

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Types of Power
1. Legitimate power
 This is a type of formal power that you receive when you
occupy a certain position in your organization.
 Depending on the position, it gives you authority within the
company. It also lasts as long as you remain in that role.
 This type of power is recognized by subordinates. For this
reason, it works well in hierarchical organizations such as the
military.
 Legitimate power is obtained through demonstrating you have
the skills required for the role. Because this type of power is
given, it can also be taken away. Effective leaders don’t
depend solely on legitimate power. Instead, they use it in
combination with others.

Types of Power..
2. Reward power
 Reward power means having the capacity to offer rewards or
benefits in exchange for carrying out a task or achieving a
result.
 Rewards usually come in the form of Salary hikes, benefits,
promotions, or public praise. However, this type of power is
not always as effective as some leaders think.
 It should be relevant and tangible enough to motivate your
employees. It should also be something that’s within your
power to give and doesn’t depend on your superiors.
 This type of power may help achieve results, but it doesn’t
necessarily ensure the support or commitment of your
employees.

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Types of Power…
3. Expert power
 Expert power comes from having both deep technical knowledge
and extensive experience in your field of expertise.
 When you’re the expert in your field, people in your company
naturally come to you to benefit from your knowledge. Your
expertise gives you credibility, and people trust and respect your
opinions.
 Expert power gives you the ability to influence co-workers
across all levels of the organization. This enables you to steer
the growth and development of both individual colleagues and
the company as a whole.
 However, a true expert knows they must continue developing
their knowledge and skills to maintain credibility.

Types of Power…
4. Referent power
 Referent power is a kind of power or influence that comes from being
liked or admired by people. It cannot be forced or assigned.
 Specific to an organizational setting, people can hold referent power
regardless of their titles, positions, or skill sets because referent power is
relationally oriented.
 Leaders get referent power through qualities that inspire trust and
respect in their colleagues. These include honesty and integrity.
 A person who holds referent power has excellent interpersonal skills and
exudes confidence. This makes them natural leaders. They listen to their
colleagues and offer help and support.
 This type of power is internal rather than external. It is a personal power
that cannot be handed to you by someone else. As your referent power
grows, so too will your capacity to influence your colleagues.

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Types of Power….
5. Coercive power
 Coercive power is one of the most commonly used in many workplaces, yet it
is also the least effective.
 It involves using threats to force people to do your will. They might not agree
with what they have to do, but they do it out of fear of repercussions such as
losing their jobs.
 For example, in many companies, leaders demand constant innovation and
new ideas from their employees. Those who don’t measure up face being
replaced by someone else.
 Although it may work in the short-term, coercive power creates unhappy,
disengaged employees and is best avoided. It can also negatively affect
employee retention efforts.

Types of Power….

➢ Three additional types of power:

▪ Charismatic power: Charismatic power is the
influence created by an individual's exceptional
personal qualities.
▪ Mahatma Gandhi ji is an example of a leader with
charismatic power because he empowered followers
to action through his vision for a cause for the
National harmony and India’s freedom.

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Types of Power….
▪ Reflected power: Since reflective leadership focuses on
continuously improving and developing, it's one of the more
effective leadership styles. By regularly reflecting on your
beliefs and values and incorporating them into your actions,
you can make ethical decisions and enable your company to be
more purpose-driven.
▪ Emotional power: It is the ability to perceive, use,
understand, manage, and handle emotions. People with high
emotional power can recognize their own emotions and those
of others, use emotional information to guide thinking and
behavior, discern between different feelings and label them
appropriately, and adjust emotions to adapt to environments.

Difference between Authority and Power

Authority Power
It is narrower in scope It is wider in scope
It is the legitimate right of superior to It is the ability of one person to
command and get his subordinates to influence another person to act in a
perform a certain act certain way.
It rests in the chair (or the position).
With the change in position. The It rests in the individual. Hence even
authority of the person also changes. when his position has changed his
A traffic Policemen on duty has the power remains with him.
authority to control and direct the
traffic. But after retirement, he can no
longer do it since he has no authority
now.

Continued…
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Difference Between Authority and Power

Authority Power
It can be delegated to a subordinate It cannot be delegated. A manager who is
by his superior. A manager who has by birth a very able decision-maker and
the authority to purchase machine good communicator cannot hand over
worth INR 10 lakh on his own can his ability to his assistant.
delegate his authority to his assistant.
It is mostly well defined conspicuous It is undefined, inconspicuous and
(shown in the organization chart.) and infinite. Its location cannot be known
finite (i.e., commensurate with from the formal organization chart. As a
responsibility). matter of fact, one may find it in
unspecified places.

Continued…
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Difference Between Authority and Power

Authority Power
It is what exists in the eye of the It is what exists in the fact. It is the de
rule , practise or law. It is a de jure facto concept. Some people in
concept. It is mostly nominal. We organisation exercise significant power
find many organisational figure far beyond the accepted borders of their
heads who are administrators in authority. They are the real wire pullers
name only. They may be regarded as behind the figure heads.
“reigning without ruling.”
It serves as a basis of formal It serves as a basis of informal
organization. organization.

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Influence
➢ Influence has no element of fear. Employees accept influence
voluntarily or perhaps unconsciously out of respect for the
manager.

➢ The following are some other ways in which an organization can

develop the influence of an executive by:

➢ Giving him an impressive title, salary, office and privileges

➢ Channeling all important information through him

➢ Backing-up his decisions

➢ Regularly paying attention to his advice

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Responsibility
➢ Responsibility is the obligation of a subordinate to perform an assigned and accepted task. When a
superior assigns some work to a subordinate, it becomes his responsibility to perform it.
➢ Responsibility has two dimensions:
i. Responsibility for – “Responsibility for” is the obligation of a person to perform certain duties
written in his job description or otherwise accepted by him.
ii. Responsibility to – “Responsibility to” is his accountability to his superiors. It is inevitably
associated with check-up, supervision, control and punishment.
➢ Responsibility is divided into two parts at the time of delegation:
i. Operating responsibility - The subordinate assumes only the operating responsibility for the
task. The superior retains ultimate responsibility for getting the job done. If the subordinate
fails to perform the job (operating responsibility), the superior is held responsible for this
failure (ultimate responsibility).
ii. Ultimate responsibility (also to be understood as Accountability) - Ultimate responsibility
cannot be shifted or reduced by assigning duties to another.
➢ Responsibility may be specific or continuing. Continued…

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Responsibility
Authority should be commensurate with responsibility

➢ It means that the subordinate must have been delegated enough

authority to undertake all the duties which have been assigned to
him and for which he has accepted responsibility.

➢ The advocates of this parity principle say that authority and

responsibility should be exactly equal.

➢ Inequality between the two produces undesirable results.

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Line, Staff and Functional Authority

LINE AUTHORITY

In this, a superior exercises direct command over a subordinate.

It is represented by the standard chain of command that starts with

the board of directors and extends down through the various levels
in the hierarchy to the point where the basic activities of the
organization are carried out.

Continued…
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LINE AUTHORITY

Line, Staff and Functional Authority

STAFF AUTHORITY
.
Its nature is advisory. In this, a staff officer has the ‘authority of ideas’ only.
There are four levels of authority of a staff man:
➢ Voluntary consultation HIGHEST Functional Consultation

➢ Compulsory consultation
Concurring Consultation
➢ Concurring authority
➢ Functional authority
Compulsory Consultation

LOWEST
Voluntary Consultation

22 Continued…

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Line, Staff and Functional Authority

FUNCTIONAL AUTHORITY

➢ Functional authority gives individuals the ability to make decisions regarding the way a
department will be run. They can create, manipulate, or change procedures in order to
complete a project. It is delegated by their common superior to a staff specialist or a
manager in another department.

➢ In this, a staff officer can give direct orders to people in other departments outside his
formal chain of command instead of making recommendations to them.

➢ Whenever functional authority is given to a line officer, it is known as functional line

authority, and whenever it is conferred upon a staff man, it is known as functional staff
authority.
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Line/Staff Scalar principle

Concepts • The clearer the line of authority, the

clearer will be the responsibility for
and decision making and the more effective
will be organizational communication.

Functional Line authority

Authority • Relationship in which a superior exercises

direct supervision over a subordinate.

Functional authority

• Right delegated to an individual or a

department to control specified processes,
practices, policies, or other matters
relating to activities undertaken by
persons in other departments.

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Line Authority and Staff

Line Authority and Staff

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Line and Staff Conflict

➢ Complaints of Line Departments
▪ The staff people encroach upon their authority and prerogatives.
▪ The advice given by staff people is mostly academic and unhelpful in
achieving production goals.
▪ When a project is unsuccessful, it is the line people who are blamed
and held responsible for its failure but when it is successful, the staff
people receive credit.
▪ Staff people fail to see the whole picture. They tend to operate in
terms of the limited objectives of their own specialty rather than in
the interests of the business as a whole.

Continued…
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Line and Staff Conflict

➢ Complaints of Staff Departments

▪ Line people are generally ignorant and bull-headed. They resist

new ideas. They fear that changes in methods may expose
forbidden practices and departmental inefficiency. They fear
that changes in methods may bring personnel changes.
▪ Line people distrust, non-cooperate and even sabotage staff
plans.
▪ Staff has not enough authority to translate its advice into
action.
▪ Line departments receive preferential treatment in matters of
staff allowances and other facilities on the basis of their being
earning departments.
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Line and Staff Conflict

➢ Two ways to reduce the Line and Staff conflict:

i. Better understanding of the nature of the relationship

between line and staff

ii. Reducing the visibility of status symbols

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Delegation Authority is delegated when a

of superior gives a subordinate
discretion to make decisions.
Authority

The process of delegation

involves
Holding the person
Delegating
Determining the in that position
Assigning tasks to authority for
results expected responsible for the
the position, accomplishing
from a position, accomplishment
these tasks,
of the tasks.

Continued…

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Delegation of Authority

Delegation of authority is a routine process of granting

formal authority to the subordinates for fulfilling a
responsibility given by the superior. However, superior
remains accountable for the said task or responsibility.

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The Art of Delegation

 Studies almost invariably find that poor delegation is one of the

causes of managerial failures.

 Much of the reason lies in personal attitudes toward delegation.

Continued…

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Personal Attitudes toward Overcoming Weak Delegation

Delegation
Receptiveness
Willingness to Let Go
Willingness to Allow Mistakes by
Subordinates
Willingness to Trust Subordinates
Willingness to Establish and Use Broad
Controls

Continued…

Advantages of Effective Delegation

➢ It relieves the manager of his heavy workload

➢ It leads to better decisions
➢ It speeds up decision-making
➢ It helps train subordinates and builds morale
➢ It serves as compensation to those employees who face the
prospect of limited advancement
➢ It helps create a formal organization structure

34 Continued…

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Barriers to Effective Delegation

(On the Manager’s Side)

➢ Fear of Loss of Power

➢ The “I Can Do it Better Myself’ Fallacy
➢ Lack of Confidence in Subordinates
➢ Fear of Being Exposed
➢ Difficulty in Briefing
➢ Inability to Establish and Exercise Proper Controls

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Barriers to Effective Delegation

(On the Subordinate’s Side)
➢ They may refuse to accept authority because of their fear of criticism by
their superior in case they commit mistakes in decision-making.
➢ They may avoid accepting any authority if they feel that they lack mental
and physical ability, adequate information and resources to help them
discharge their duties properly.
➢ They may believe that the authority is inconsistent with the purposes of the
organization and this may be the cause for their unwillingness to accept it.
➢ They may avoid accepting any authority because there are no positive
personal gains to them for assuming extra responsibility.
➢ They may refuse to accept the authority because it is outside certain limits.

36 Continued…

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Guidelines to Effective Delegation

➢ Make sure that delegation is not loss of power or that you cannot
do it yourself.
➢ Remember that only two tasks in a list of ten tasks deserve topmost
priority.
➢ Select the subordinate in the light of the job.
➢ Before delegating authority, make the nature and the scope of the
task clear. Avoid overstepping the subordinate’s “area of
acceptance”.
➢ Assign authority proportionate to the task.
➢ Make the subordinate clearly understand the limits of his authority
and deadlines.
37 Continued…

Guidelines to Effective Delegation

➢ Give the subordinate some positive incentives for accepting

responsibility.
➢ Train the subordinate properly.
➢ Create a climate of mutual trust and goodwill.
➢ Do not make the subordinate accountable to more than one
superior.
➢ Let there be no overlaps or splits in delegation which usually result
from the superior’s desire that the authority over a given situation
should be shared by individuals or units.
➢ Learn to manage time.

38 Continued…

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Guidelines to Effective Delegation

➢ Try to stretch the capacities of your second line in office for your
efficiency in future.

➢ Once a delegated job is done well, acknowledge and appreciate.

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Decentralization of Authority

➢ Decentralization is a relatively permanent structural

framework of an organization designed by organizational
policy.
➢ It indicates the distribution of authority ,responsibility and
accountability by the top management in favour of the lower
levels of organisation that are close to the points of action.

➢ A decentralized organization shows fewer tiers(levels) in the

organizational structure, wider span of control, and a bottom-
to-top flow of decision-making and flow of ideas.

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Decentralization of Authority
 Decentralization of authority involves a system within an
organization in which the top, middle, and lower levels of
management participate in decision-making.
 Decentralization is the tendency to disperse decision-making
authority in an organized structure.

Centralization and decentralization as tendencies

Difference between Delegation and

Decentralization
Delegation Decentralization
Delegation is the process. It mainly Decentralization is dispersal of
refers to the granting of the authority authority. It is the system that exists as
and the creation of the responsibility as the result of the systematic delegation
between one individual and another of authority.

In this, the superior continues to be In this, the superior is relieved from his
accountable for the work delegated to accountability of the work and the
his subordinate. subordinate becomes liable.
Delegation is vital and essential to the Decentralization is optional in the
management process. Only through sense that it may not be followed
delegation, subordinates can be systematically.
involved in the organization and
management can get things done.
42 Continued…

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Objectives of Decentralization

Decentralization - Advantages

➢ Decentralization reduces problem of communication.

➢ Decentralization permits quicker and better decision-making.
➢ Decentralization recognizes and actually capitalizes on the
importance of the human element. Under decentralization,
employees are able to exercise more autonomy.
➢ Decentralization leads to a competitive climate within the
organization.
➢ Decentralization ensures the development of employees.
➢ Decentralization facilitates diversification of products, activities and
markets.

44 Continued…

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Centralization - Advantages

➢ Coordination of activities of subordinates is better

achieved.
➢ There is no duplication of efforts or resources.
➢ Decisions take into account the interest of the entire
organization.
➢ Strong central leadership develops which may be required
in crisis.

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How Much Decentralization?

➢ Some situational factors are considered in determining the amount
of decentralization appropriate for an organization:
▪ Size of the Organisation
▪ History and Age of the Organisation
▪ Philosophy of Top Management
▪ Abilities of Lower-level Managers
▪ Strategy and the Organization's Environment
▪ Nature of Management Function
▪ Available Controls
▪ Costliness and Significance of Decisions

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Factors Influencing Decentralization

Limitations of Decentralisation

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Empowerment

➢ Empowerment is the authority of an employee to make decisions

in his area of responsibility, without first having to get approval
from someone else.
➢ Empowered employees are given not only the authority to make
decisions, but also financial resources to implement their
decisions.
➢ Empowerment is operationalized through participation,
innovation, access to information and
accountability/responsibility.

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Empowerment
Speed
Morale
Full use of Employees’ Potential
Non-financial Incentive

Greater Potential for Chaos

Role Conflict

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Requisites for Success of Empowerment

➢ Should be strong ideological commitment of the head of the
organization.
➢ Scheme should be designed after identifying employees’ real needs
and with their participation.
➢ Should be transparency, openness, trust and greater error tolerance.
➢ Should be enhanced communication.
➢ Should be variable rewards with some group component.
➢ Should be 360 degree feedback to get a complete picture of employee’s
performance.
➢ Should be periodical evaluation of the scheme.

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THANK YOU

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