Rathore Textiles: Responsibility Without Authority
Rathore Textiles is a cloth-trading firm in Jaipur with three branches and 60 employees. Mr. Rathore, the proprietor, personally signs every purchase order above ₹5,000 and every discount above 2 per cent. The four branch heads cannot approve even a ₹1,000 replacement of damaged cloth; they forward files to Jaipur and wait. A purchase clerk was recently told by Mr. Rathore to 'settle the Surat supplier's dispute immediately', but was given no power to commit any amount, and the supplier has now sent a legal notice. Files take 9 to 14 days to move. Two large customers have shifted to a competitor that confirms orders the same day. Mr. Rathore works twelve hours a day, complains that 'nobody in this firm takes responsibility', and has begun personally re-checking the work of branch heads. He has also stopped branch heads from recruiting even temporary helpers during the wedding season.
1. Identify the element of delegation that was missing in the instruction given to the purchase clerk. Explain the element and show how its absence produced the legal notice.
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The missing element is authority - the right to command and to commit the firm's resources.
Delegation has three elements: authority, responsibility and accountability. The clerk was given responsibility ('settle the dispute immediately') but no authority to approve any amount, so the task assigned to him was impossible to perform. The principle of parity of authority and responsibility requires that the two be balanced; here responsibility exceeded authority, and the result was inaction followed by a legal notice.
Accountability - answerability for the final outcome - cannot be delegated at all. It always remains with the person who delegated, so Mr. Rathore cannot blame the clerk: legally and organisationally the notice is his. This is the sharp edge of the case. A subordinate can be held accountable only for what he had the power to do. Giving an instruction without matching it with authority makes the instruction decorative.
2. Mr. Rathore says 'nobody takes responsibility'. Analyse whether the fault lies with the employees or with the owner, using the principle of parity of authority and responsibility and the idea of centralisation.
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The fault lies mainly with Mr. Rathore.
Branch heads carry responsibility for customers and stock but hold no authority to act - the textbook definition of a mismatch. When authority is withheld, employees can only forward files and wait, which the owner then interprets as evasion. Accountability for results cannot fairly be pinned on people who were never empowered to produce those results.
Centralisation itself is not a fault. In a small firm it gives uniformity, tight control and quick decisions by the person with the fullest picture. But centralisation becomes a defect once delay costs more than control gains: files moving in 9–14 days, two large customers lost to a same-day competitor, and the owner re-checking branch heads' work himself. That last symptom is diagnostic - personal re-checking is supervision substituting for structure, which raises cost and destroys whatever confidence the branch heads had left. The correct response is not longer hours but an explicit delegation policy.
3. Advise Mr. Rathore on what he should delegate, what he must retain, and one risk of decentralisation he must guard against.
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Delegate (with written limits): routine purchases and damaged-cloth replacements up to, say, ₹25,000 per order; discounts within a stated band up to 2 per cent, with anything above coming to him; recruitment of temporary helpers against a sanctioned headcount and wage budget; settlement of supplier disputes up to a fixed money value.
Retain: capital expenditure, opening or closing a branch, appointment and appraisal of branch heads, credit limits for large customers, and overall pricing policy. These set the boundaries within which delegation happens.
Risk to guard against: loss of control and inconsistent practice. Once four branches decide independently, they can buy at different prices, offer different discounts and duplicate purchasing effort. Build in a monthly stock-and-sales report, a branch budget, an internal check on purchases, and a written discount policy so that customers are treated alike. The test for Mr. Rathore is simple: if a decision is repeatable and within a budget, it belongs to the branch; if it changes the shape of the business, it stays with him.