Amrita completed her Master’s Degree in Fashion Technology from Paris. After coming back to India, she observed a shift towards formal wear in the fashion industry. To grab this opportunity, she opened a boutique in a posh area of Delhi.
She used environmental friendly method of production. To make the store run efficiently, she divided the work into small tasks so that her employees are well trained and the wastage can be reduced. Similar activities were grouped together and departments were formed.
She assigned responsibility to her sales staff in the form of clear cut targets and gave them authority to close the deal by offering a discount of 5% but the decision to give any further discount rests with her. The departments were headed by the specialists who were appointed through placement agencies and management consultants. Levels were created in the organization and helped in establishing reporting relationship.
In the earlier period of her venture, she asked her employees to put in extra hours of work. In return, she promised to give them special incentive within one year. Her business was doing well and she honours her commitment by giving them bonus.
Amrita was a good leader. She develops plans and makes decisions in consultation with her subordinates. However, she was biased with her female employees when it comes to solving conflicts among her staff.
She assigned responsibility to her sales staff in the form of clear cut targets and gave them authority to close the deal. By doing so, she followed a principle of Fayol. Identify it.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Authority and responsibility
Option (1) Discipline — Incorrect. Discipline is obedience to the rules and agreements of the organisation. Here, work and power were given to sales staff.
Option (2) Centralization and decentralization — Incorrect. This is about how much decision-making power is kept at the top or given to lower levels. Here, the point is that responsibility was matched with authority.
Option (3) Authority and responsibility — Correct. Amrita gave her sales staff responsibility in the form of clear targets and also gave them authority to close the deal. Authority was matched with responsibility, so there is a balance between the two.
Option (4) Order — Incorrect. Order means the right person and the right material in the right place at the right time. It is not about duty and power.
NCERT (2026-27 Edition): “(ii) Authority and Responsibility: … 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 abuse of managerial power. At the same time a manager should have necessary authority to carry out his responsibility. …” |