ACCA Applied Knowledge · Business and Technology · The formal and informal business organisation
A manager of a business division has authority to make decisions but remains accountable to the board for the results. Which term describes the process by which the manager passes some of that decision authority to a subordinate while retaining accountability?
The term is delegation. A manager gives a subordinate authority to act or decide but stays ultimately accountable for the results. Centralisation describes concentration of authority at the top, and span of control describes the number of subordinates reporting to a manager.
- ADelegationCorrect
- BCentralisation
- CSpan of control
- DScalar chain
Explanation
Delegation is passing authority to carry out tasks or make decisions to a subordinate, while the delegating manager remains accountable for the outcome. Centralisation is about where authority is concentrated, not the act of passing it down. Span of control concerns number of subordinates.
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