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The relationship of authority and subordination among the various personnel and groups should
be properly determined. The position of each individual is to be fixed, i.e., whether he is to be
in the position of authority or in the subordinate position. This work is very important. In this
connection, the following principle is to be followed. The greater the responsibility attached to
a post, the higher will be the position of the person holding the post, in the hierarchy. Thus, it
is stated that authority should go with responsibility.

When the duties are assigned, there will be two types of employees. Some have authority and
others take up responsibility. The former occupy a superior position, while the latter are placed
in a subordinate position. Authority refers to the right to make decision and to command
subordinate to follow these decisions. It is the supreme coordinating power and is very
important for the managerial job.

Responsibility refers to the obligation of a subordinate. Every subordinate has to perform the
duty assigned to him. The essence of authority is obligation. It arises from the superior
subordinate relationship. It has a meaning, only when it is applied to a person. Authority seems
to flow from the superiors to the subordinates. Every manager can see that his orders are
executed by persuasion, coercion or economic social sanctions. Persuasion is the best means.
Otherwise, the task may not be successfully accomplished, responsibility cannot be delegated.
But authority can be delegated. When these expressions 'Authority' and 'Subordination' are
used, they should not create a sense of superiority or inferiority in the minds of the employees.
Authority cannot be concentrated in the hands of one or a few individuals. It appears to flow
from top to bottom. But it is not really so. There must be de-personalization of orders. This will
help in developing good industrial relations among all the employees.

In management literature, responsibility is one of the most misunderstood words, usually,

responsibility is referred to as 'Delegation of Responsibility' holding a person responsible or
carrying out a responsibility. People use the word responsibility in different senses as referring
to a duty, an activity or an authority. Actually responsibility can be defined as the 'obligation'
of a subordinate to perform a duty which has been assigned to him. Thus, obligation is the
essence of responsibility. Normally the superior subordinate relationship gives rise to this
responsibility as the superior is vested with the authority to require specified services from his
subordinates. In case of business, this authority is generally a result of the contractual

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arrangement under which the subordinate has agreed to perform certain services in return for a
monetary reward. In this sense, authority flows from the superior to the subordinate manager
to whom certain duties are assigned and responsibility is the obligation of the subordinate to
accomplish these duties. Responsibility can be discharged by a single action or it may be a
continuous obligation.

DISTINCTION BETWEEN AUTHORITY AND ACCOUNTABILITY

The term 'Accountability' is used by a few writers in the field of management to indicate the
managers’ liability for the proper discharge of the duties by his subordinates. In the military,
the concept of accountability is used to indicate the duty and an officer to maintain accurate
records and to safeguard public property and funds.

Thus, the three words confusingly used in varying sense in management literature are authority,
responsibility and accountability. A less confusing use would be to use the word 'authority' as
referring to the power to get something done, the word responsibility as the liability of the
individual for failing to discharge his responsibility. One is thus accountable for failures to his
boss. Accountable is similar to tendering of accounts in its case, which refers to discharging of
the responsibility. To carry out responsibility, a manager requires adequate authority or power.

7.12 DISTINCTION BETWEEN RESPONSIBILITY AND DELEGATION

Whilst a manager can delegate his authority to his subordinates, responsibility cannot be so
delegated. A manager is responsible for the performance of his duties even though he may
delegate to a subordinate, authority to accomplish a service and the subordinate also in his turn
may delegate a part of authority received by him. Therefore, delegation does not absolve a
manager of his own responsibilities to perform his duties. In short no manager can shift
responsibility to his subordinates. For example, the managing director of a company employed
by the board of directors cannot avoid total responsibility for the conduct of the enterprise.
Therefore, responsibility cannot be delegated in this sense. A manager cannot relieve himself
of his responsibility although he can delegate authority and assign duties to his subordinates.

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DIFFICULTIES IN DELEGATION

Through plays a dominant role in a decision as to "what to delegate" and "to whom to delegate".
Executive knows for certain that once authority is delegated they will lose the grip over their
subordinates and also control over the operations. It is natural that the executives may not like
to lose either the grip or control over the operation. But the important psychology is that by
their nature executives have no confidence in their subordinates. They feel that the subordinates
are not capable of shouldering the responsibility, therefore, the question of delegation of
authority does not arise.

Sometimes, executives suffer from inferiority psychosis. They know for certain that though
they occupy a position of strength but their knowledge and skill are not up to the mark. Their
subordinates are well equipped and thus they may do the assigned job well. No executive would
like to delegate when he feels that his subordinate may surpass him. From the above discussion
we may come to a conclusion that there are three types of fears which discourage delegation
and thus create difficulties in delegation. They are :
1. Fear of loosing the grip and control over the operations;
2. Fear of not a better performance by the sub-ordinate to whom the authority may be delegated;
and
3. Fear of better performance by the subordinate to whom the authority may be delegated.
The above difficulties arise out of –
(i) Luck of mutual confidence;
(ii) Non-existence of atmosphere of team-work;
(iii) Non independence in thinking and behaviour;
(iv) No proper and ambiguous definition of common goals to be achieved;
(v) No inter-exchange of ideas and suggestions;
(vi) No favourable management climate;
(vii) Existence of element of fear and frustration; and
(viii) Incapable hands manning the executive positions.

Delegation is an important managerial technique. Every effort should be made to encourage

delegation. This creates a sense of belonging among subordinates. It develops the personality
of the subordinates and helps in evaluating the managerial performance. It also induces a sense

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of security among both the executives and their subordinates. A favourable management
climate should be created for encouraging delegation.

MEANING OF DECENTRALISATION

Decentralization is a word that we frequently hear take about by political leaders and business
managers. Many of them view decentralization as a panacea or a magical device that will
compensate for poor management, encourage participation, increase efficiency, and raise
morale. Most people do not have a clear view of what decentralization is and, as often as not
when an organization is having "decentralization", it is for the wrong reasons and in the wrong
way the term is understood and used. Earnest Dale mentions four criteria to measure the extent
of decentralization in an organization. He states that whenever decentralization is greater.

1. The greater is the number of decisions made at lower levels;

2. The more important are the decisions made lower levels;
3. The more is the number of areas in which decisions can be made at lower levels; and
4. The fewer are the people to be consulted the less is the checking required on the decisions
made at the lower levels. The way many people use the term, decentralization mean about the
same thing as delegation–simply pushing authority down to subordinates. But decentralization
means much more than simple delegation. Decentralization is a philosophy of the organization
and management, one that implies both selectively determining what authority to push down
into the organization; developing standing plans (such as policies) to guide subordinates who
have this authority delegated to them; and implementing selective but adequate controls for
monitoring performance. Thus, decentralization is a philosophy of organization and
management which involves both selective delegation of authority as well as concentration of
authority through the imposition of policies and selective but adequate controls. According to
McFarland, decentralization is a situation in which ultimate authority to command and ultimate
responsibility for results is localized as far down in the organization as efficient management
of the organization permits. According to Allen, decentralization refers to the systematic effort
to delegate to the lowest levels all authority except that which can only be exercised at central
points. Thus, decentralization means reservation of some authority (to plan, organize, direct
and control) at the top level and delegation of authority to make routine decisions at points as
near as possible to where action takes place.

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