Delegation of authority in business management - some basics

Delegation of authority is a widely discussed term in governance as well as business. Though the intended activities under delegation are more or less same in business and governance, the means and aims of decentralization may vary in certain important parameters. I chose the title ‘Delegation of authority in business management - some basics' as I would like to discuss about decentralization in governance in another article.

Though most of the managers, practice delegation as a usual procedure, a theoretical knowledge of the system would help them to perform better.

Authority can be expanded as ‘the right to command'. Two important streams of thought on authority are (i) the Classical Theory of Authority and (ii) the Acceptance Theory of Authority. As per the Classical Theory, managers acquire their authority from a right to certain private property ensured by al law. Where as Acceptance theory stipulates that authority is derived from the willingness of the subordinates to accept the commands. In practical we see authority as a combination of these two and more.

Delegation is the process of passing the authority from one level to another in an organization. Delegation is a major solution to cope with the increasing workload of the managers, as the business grows. The process of delegation has the following steps:

1. Entrustment of duties or Assignment of responsibilities.
2. Granting of authority
3. Creation of Accountability

A delegation of authority becomes successful only when it can answer the questions (i) what to delegate?, (ii) when to delegate? and whom to delegate? Based on the vivid answers to the above questions, the superior delegates clearly identified authorities to the subordinates. The superior should also create an obligation in the part of the subordinate to perform it in the desired way.

Though delegation is an effective way, it is not free from hazards and hindrances. Important among them are

• The superior's fallacy that only he can do the things in the right way.
• Managers' lack of ability to direct subordinates having delegated authorities.
• Lack of confidence in the subordinates to exercise the delegated authority.
• Superiors fear that some reckless subordinates may risk his career by reckless and thoughtless exercise of the authority. They also fear that good performers among the subordinates may outsmart him.
• Absence of proper controls.
• Subordinates may find it safe to take the orders of the superior than taking the responsibilities by them selves.
• The subordinate's fears the criticism for mistakes.
• Lack of information and training.
• Subordinates fallacy that they are already overloaded.
• Subordinates' dissatisfaction over the pay package.

Above problems can be overcome through proper communication, balancing the authority and responsibility (that is sufficient authority to execute given responsibilities), Incentives for additional responsibility (incentives can be in the forms of better emoluments, promotion scopes etc), capacity building though proper training etc etc.