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CMA Foundation · Fundamentals of Business Economics and Management · Organisation Structure, Responsibility, Accountability and Delegation of Authority

Meera, a branch head at a Chennai bank, is held answerable for a branch's loan recoveries but has no power to approve restructuring of overdue loans. Which organisational principle is chiefly violated?

The principle violated is parity of authority and responsibility. Meera is held answerable for loan recoveries yet cannot approve restructuring, so her authority is insufficient for her accountability. Effective management requires authority to match the responsibility and accountability assigned to a position.

  1. AUnity of command
  2. BParity of authority and responsibilityCorrect
  3. CSpan of control
  4. DScalar chain

Explanation

Meera is answerable for results but lacks the authority needed to influence them, so authority is smaller than accountability and responsibility. This breaches the principle that authority should be commensurate with responsibility. Unity of command concerns the number of superiors, which is not described here.

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