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Unit-IV-PM

Unit-IV-PM

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251/ 553/ 552MG103 Principles of Management
UNIT IV
Authority –
Delegation-Decenralisation- Difference between authority andpower- Uses of authority- distinction between Centralization andDecentralization – Responsibility – Line and staff relationship – Staffing –Sources of recruitment – Selection process – Training – Direction – Natureand Purpose of Directing – Motivation, Nature and Importance of motivation;Types of motivation; Theories of motivation- Maslow, Hertzberg X, Y and Z;Leadership – meaning and importance; Traits of a Leader; Leadership stylesLikert’s System of Management, Tannenbaum & Schmidt Model andManagerial Grid.
Authority:
Authority is defined as the right to give orders and the power to get obedience. In the context of an organization, authority might be termed as 'institutionalized power'. A person in an of organizationauthority by virtue of the requirements of the role held by him. Authority resides in a person and arisesout of the demands of position in organizations. Responsibility is the obligation of a subordinate to perform the duty as required by the superior. There should be parity between authority responsibilities.This means that the subordinate must have been delegated enough authority undertake all the dutieswhich have been assigned to him and for which he has accepted responsibility Authority withoutresponsibility is liable to be abused; responsibility without authority is frustrating. Thus, inequity between delegated authority and responsibility produces undesirable results.
SOURCES OF AUTHORITY:
Management scholars are divided on whether authority originates at the top and flows down intraditional fashion or whether it originates at the bottom as a kind of consent of the subordinates. We canclassify the views of various management writers under the three headings, namely, formal authoritytheory, acceptance theory and competence theory.These viewpoints are discussed below:
(i)Formal Authority Theory
:According to this theory, authority' is viewed as originating at the top of an organizationhierarchy and flowing downward through the process of delegation. The ultimate authority in acompany lies with the shareholders who are its owners. The shareholders entrust themanagement of the company to the Board of Directors and delegate to it most of their authority.The Board of Directors delegates authority to the Chief Executive and the Chief Executive inturn to the departmental heads and so on. Every manager in-the organization has some authority because of his organizational position. That is why, the authority is known as formal authority.Subordinates accept the authority of a superior because of his formal position in the organization.A manager in the organization has only that much of authority which is delegated to him by hissuperior.The shareholders of a company have authority over the company because of theinstitution of private property in the society. Various social factors, laws, political and ethical
Prepared by A. Jayakumar.BBM, M.B.A, M.Com
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251/ 553/ 552MG103 Principles of Management
considerations, and economic factors put certain limits on their authority and the organizationhas to function within these limits. In fact, the basic sources of authority can rest in the socialinstitutions themselves. In a society, where private property does not exist as in the case of socialist economies, the origin of authority can be traced to the elements of basic group behavior.The concept of authority as being a right transmitted from the public through social institutionsto business managers is the central theme of the formal authority theory
(ii)Acceptance Theory:
According to this theory, the authority is the power, which is accepted by others. Formalauthority has no significance unless the subordinates accept it. The degree of effective authorityassessed by a manager is measured by the willingness of the subordinates who accept it. "Anindividual will accept an exercise of authority if the advantages accruing to him from accepting plus the disadvantages accruing to him from not exceed the advantages accruing to him from notaccepting plus the disadvantages accruing to him from accepting; and conversely, he will notaccept an exercise of authority if the latter factors exceed the former." Thus, the acceptability of an order will depend upon relative consequences, both positive and negative. Many orders may be fully, acceptable, many fully unacceptable, and others only partially acceptable. Barnardmaintains that a subordinate will accept a order if he understands it well, if he believes it isconsistent with the organization anal objectives and compatible with his own interest.'The acceptance theory of authority has certain limitations. According to it, a manager hasauthority if he gets obedience from the subordinates. But a manager is not able to know whether his subordinates will obey his order unless the order is carried out or disobeyed by them.
(iii)Competence Theory:
According to this theory, an individual derives authority because of his personalcompetence.
Urwick 
identified formal authority as being conferred by organization, technicalauthority as being implicit in a special knowledge or skill, personal authority as being conferred by seniority or popularity. Thus, a person may get his order or advice accepted not because he ishaving any formal authority, but because of his personal qualities. These qualities may betechnical competence and social prestige in the organization. For example, a person is expert in a particular field and other people go to him for guidance and follow his advice as if that were anorder.
Limitations of authority:
The authority of any position in the organisation is not absolute. It is subject to various legal,social, political and economic factors. In an organisation the scope of authority decreases atsuccessively lower levels. It is maximum at the top and minimum at the lowest level. The use of authority by a manager over his subordinates is restricted by the following factors:i.
Biological limitations – 
a manager cannot ask a subordinate to do something which hehimself cannot do. Human beings do not have the capacity to do certain things. E.g. to climb theside wall of a building.ii.
Physical limitations – 
 physical laws, climate, geographical factors, etc., restrictmanagerial
authority
to a great extent. For example, a supervisor cannot order workers to makeoil from wood.
Prepared by A. Jayakumar.BBM, M.B.A, M.Com
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251/ 553/ 552MG103 Principles of Management
iii.
Legal constraints – 
a manager has to exercise his
authority
within the bounds of variouslaws passed by the government. For example, a manager cannot order the workers not to form or  join a trade union.iv.
Social constraints – 
social sectors impose restrictions on the exercise of 
authority
by amanager. For instance, the task assigned to employees must conform to the group’s fundamentalsocial beliefs, creeds, codes and habits.v.
Organisational limitations – 
a manager’s authority is restricted by the objectives and policies of the organisation. He cannot go against the policies and rules of the organisation aslaid down in Memorandum of Association, Articles of Association, Partnership Agreement,Policy Manual, etc.vi.
Economic constraints – 
market forces and other economic conditions restrict managerial
authority
. A sales manager cannot ask his sales persons to sell products at a higher price inhighly competitive market.vii.
Limited span – 
a manager’s authority is limited because there is a limit on the number of subordinates which he can effectively supervise. A manager cannot take decision aboutunlimited number of subordinates. Similarly, a manager can exercise only that much
authority
which is specifically delegated to him.
DELEGATION OF AUTHORITY:
Delegation is the essence of good organization. It is an important process to manage the affairsof an enterprise satisfactorily. Delegation of authority means conferring authority to another toaccomplish a particular assignment. That means a manager can get things done through others bysharing authority with them. Delegation stands for calling others to render help in accomplishing a job.
Delegation:
The act of assigning authority and responsibility for completion of specific activities to asubordinate, that is, how to distribute formal authority throughout the organisational structure is a keyorganising decision. Delegation is the assignment to another person of formal authority (legitimate power) and accountability for carrying out specific activities. The delegation of authority by managersto employees is necessary for the efficient functioning of any organisation, because no manager can personally accomplish or completely supervise all of what happens at an organisation.
The Process of Delegation:
The process of delegation involves the following steps.1.
Determination of results expected – 
first of all, a manager has to define the results hewants to obtain from his subordinates for the achievement of the organisational objectives.2.
Assignment of duties – 
the manager the assigns specific duties or tasks to eachsubordinate. He must clearly define the function of each subordinate and while assigningduties and responsibilities, he must ensure that the subordinates understand and accept their 
Prepared by A. Jayakumar.BBM, M.B.A, M.Com
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