Swaraj is running an office furniture showroom.Most of his clients are businessmen and they prefer to buy goods on credit.Keeping in mind he has given power to the sales manager Mr.Bhardwaj finds that if he can offer a credit period of 30 days as an exception to a prospective buyer he is likely to finalise a highly profitable deal for the business.So Mr.Bhardwaj requests Swaraj to grant him additional authority for offering a credit period of 30 days in the interest of the business.But Swaraj refuses to extend his authority and as a result the deal is not finalized. In the context of the above case: (a) Can Mr.Bhardwaj be held responsible for loss of the deal? Why or why not? Give a suitable reason in support of your answer. (b) Also explain the related principle.
Answers
Answer:
(A) = No, Mr. Bhardwaj cannot be held responsible for loss of the deal in the above case as he was not given the necessary authority to carry out his responsibility. There is an imbalance in authority and responsibility.
(B) = The name of the related principle is Authority and Responsibility. Authority is the right to give orders and obtain obedience by the virtue of one’s position in the organization. Responsibility is the obligation of a person to carry out the assigned task to the best of one’s abilities and skills. There are two types of authorities, namely the official authority, which is the authority to command, and personal authority, which is the authority of the individual manager. Authority is both formal and informal. According to Fayol, there should be balance between the authority given and responsibility entrusted to an employee so that he is able to carry out the assigned task. Any kind of imbalance in authority and responsibility is not good for the organization. If the authority granted to an employee is less than what is required, he will ineffective in doing his work. On the other hand, if the authority delegated to an employee is more than what is required, he may tend to misuse it.
Explanation:
Concept
Authority means the power to do a work and responsibility means the duty of doing the job.
Explanation
a) No, Mr. Bhardwaj can not be held responsible for the loss because he had no authority to increase the credit period. For increasing the credit period he needed the authority from Swaraj and because authority was not given, he can't be held responsible.
b) The related principle is principle of authority and relationship. It says that to do a work worker needs authority from appropriate person or a group of member. If he has authority then the responsibility arises of doing work for which authority is given.
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