CMA Foundation · Fundamentals of Business Economics and Management · Organisation Structure, Responsibility, Accountability and Delegation of Authority
Ms. Iyer, a sales director at a Chennai firm, delegates to a regional manager the task of closing a large client deal and gives him authority to offer discounts up to 8%. The deal is lost because of poor negotiation. Which statement is correct?
The regional manager bears responsibility for carrying out the task, but Ms. Iyer stays accountable to her own superiors for the result. Authority and duties can be delegated, whereas ultimate accountability cannot be shifted away by delegation, so she cannot escape answerability for the lost deal.
- AThe regional manager is responsible for the task, but Ms. Iyer remains accountable to her own superiors for the outcomeCorrect
- BMs. Iyer is free of all accountability because she has delegated the authority
- CResponsibility and accountability both transfer completely to the regional manager, leaving none with Ms. Iyer
- DOnly the client is accountable since the deal was not concluded
Explanation
Authority and the duty to perform can be delegated, but ultimate accountability cannot be passed down. Ms. Iyer still answers to her superiors for the lost deal. The claim that she is free of accountability is wrong because delegation does not relieve the delegator of ultimate answerability.
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