"A sales manager has to negotiate a deal with a buyer. She finds that if she can offer a credit period of 60 days, she is likely to clinch the deal which is supposed to fetch the company a net margin of say Rs. 50 crores. The company entrusts her the task of clinching the deal but gives her power to offer a credit period of only 40 days". Identify the principle of management violated in the aforesaid statement.

Authority and Responsibility

The correct answer is option 1- Authority And Responsibility.

Authority and Responsibility is the principle of management violated in the given statement. 

Authority and Responsibility must go hand in hand. In the given scenario, the sales manager is given the responsibility to clinch the deal (which requires a 60-day credit period), but not enough authority (she is only allowed to offer a 40-day credit period). This mismatch is a clear violation of the principle of Authority and Responsibility.

Authority and Responsibility: According to Fayol, "Authority is the right to give orders and obtain obedience, and responsibility is the corollary of authority. The two types of authority are 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. Managers require authority commensurate with their responsibility. There should be a balance between authority and responsibility. An organisation should build safeguards against the abuse of managerial power. At the same time, a manager should have necessary authority to carry out his responsibility.

OTHER OPTIONS

• Scalar Chain- According to Fayol, “Organisations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and the subordinates.” According to Fayol, this chain should not be violated in the normal course of formal communication. However, if there is an emergency then direct contact through ‘Gang Plank’. This is a shorter route and has been provided so that communication is not delayed.

• Unity of Command: According to Fayol there should be one and only one boss for every individual employee. If an employee gets orders from two superiors at the same time the principle of unity of command is violated. The principle of unity of command states that each participant in a formal organisation should receive orders from and be responsible to only one superior. Fayol gave a lot of importance to this principle.

• Unity of direction- All the units of an organisation should be moving towards the same objectives through coordinated and focussed efforts. Each group of activities having the same objective must have one head and one plan. This ensures unity of action and coordination.