Question Tag: Authority

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  • 10 Marks

BCL – May 2021 – L1 – Q2b – Agency

Explanation of ratification in agency and the concept of agency of necessity.

Adzoe acting for and on behalf of Maclean, was authorized to purchase corn worth Two Thousand Ghana Cedis (GH¢2,000) for Makafui. Adzoe bought the corn in Makafui’s name at Two Thousand Five Hundred Ghana Cedis (GH¢2,500), which was clearly beyond his authority. Maclean was to ratify. Makafui then failed to take delivery of the corn.

Required:
i) Explain whether Maclean would be justified in ratifying the transaction entered by Adzoe and Makafui. (6 marks)

ii) Explain the concept of “Agency of necessity”. (4 marks)

i) The question is on the law of agency. Therefore, a brief definition of who an agent is in the eyes of the law is very appropriate.

  • An agent is a person who is authorized to act for another (principal) in the making of legal relations with third parties. If the Agent acts with authority, the contract will be valid and binding on the Principal. (1 mark)
  • An agency relationship can be created by express agreement where the Agent is usually appointed to carry out a particular task, by appointment which is generally a contract between the Agent and the Principal, by the donation of a Power of Attorney to the person and other appointments must be made by a deed, this means that the Agent is being given the authority to deal with all the Principal’s property as defined in the Power of Attorney. (1 mark)
  • Ratification is a very important aspect of any agency relationship. Suppose a properly appointed agent exceeds his authority or a person having no authority purports to act as an agent. In that case, the Principal incurs no liability on the contract purportedly made on his behalf unless the Principal ratifies the contract. (1 mark)
  • By ratification, the Principal becomes liable under the contract. Ratification appears retroactively, meaning that the Principal is bound by the contract from the date on which it was originally made; the Agent is relieved from any liability to the Principal as to a third party.
  • In the circumstance of this case, Adzo, the Agent was authorized by the third party, Makafui, to purchase the corn at (GH¢ 2,000.00), but he bought the same at a price far beyond his authority.
  • Besides, Adzoe bought the corn in his name.
  • As an Agent, Adzo was expected to work within the scope of his authority ie Adzo was authorized to buy corn at a certain price, but he bought the corn at a price far beyond his authority in buying the corn in his name, Adzo acted fraudulently as an agent of Maclean. (2 marks)
  • Maclean will, therefore, not be justified to ratify the action taken by Adzoe.

In the instant case, Maclean may be justified in not ratifying the contract between Adzoe and Makafui because Adzoe’s intention when claiming to contract for Maclean was, in fact, fraudulent because he took the benefit for himself by buying the corn in his name, Adzoe acted fraudulently as an agent of Maclean. (1 mark)

ii) Agency of necessity:

Agency of necessity is an umbrella expression which two (2) quite distinct types of case may be found:

  • The first type of case raises the central issue of agency of whether A is acting with P’s authority.
  • The second type of case arises in similar circumstances of necessary emergency action but raises no agency issue.
  • The only question is; Is a person who acted to preserve another person’s endangered property entitled to an indemnity for the cost to him of so acting?
  • Indeed the agency of necessity originated in the needs and practices of the shipping business. Therefore, it was essential for the best interest of all concerned that the ship’s Master be empowered to react to all emergencies of the voyage without incurring personal liability.

From the above, the requirements that ought to arise are as follows:

  • There is a pre-existing legal relationship between the parties.
  • There is an emergency.
  • The Agent can’t communicate with the Principal.
  • The Agent is acting in the best interest of the Principal. (4 marks)
  • 10 Marks

BMIS – Jul 2023 – L1 – Q3a – Management and leadership

Explains the concept of leadership and identifies four sources of a leader’s power.

Leadership is undoubtedly an essential complement of position authority. This means that no matter the amount of authority a person wields by reason of the position he holds in an organization, if he does not possess and demonstrate effective leadership qualities, he is bound to fail in the management of subordinates.

Required:
i) In reference to the above statement, explain leadership.
(2 marks)

ii) Explain FOUR (4) sources of a leader’s power.
(8 marks)

i) Leadership:
Leadership is the art of influencing a person or group of people to willingly strive to achieve set objectives or goals. It is the ability to guide, direct, and influence the actions or activities of a person or group towards goal attainment in a given situation.
(2 marks)

ii) Sources of a Leader’s Power:

  1. Legitimate Power:
    This power is based on the acceptance by subordinates or followers that the leader has the authority to exercise influence over them due to the position he occupies in the organization.
    (2 marks)
  2. Expert Power:
    Expert power stems from the leader’s perceived expertise and special knowledge in a specific field. Followers trust and rely on the leader’s skills and knowledge.
    (2 marks)
  3. Coercive Power:
    Coercive power is based on fear and the belief that the leader has the capacity to administer punishment or create undesirable outcomes for those who refuse to obey his instructions.
    (2 marks)
  4. Referent Power:
    Referent power is derived from the followers’ identification with the leader. This power is based on the leader’s personal attributes, reputation, or charisma, which inspire loyalty and admiration.
    (2 marks)
  • 8 Marks

BMIS – Nov 2017 – L1 – Q3b – Management and leadership

Explain the concepts of leadership, power, and authority in a business context.

b) Explain the following:
i) Leadership
ii) Power
iii) Authority
(8 marks)

i) Leadership:
Leadership can be defined as the activity of influencing people to willingly act in a manner to achieve group objectives. It is a process of getting others to work willingly to achieve objectives without being coerced.
(2 marks)

ii) Power:
Power refers to the ability of one person to do something or require another person to act in a certain manner, irrespective of the nature or extent of resistance demonstrated by the person from whom the action is required.
(3 marks)

iii) Authority:
Authority is the scope and amount of discretion given to a person to make decisions by virtue of the position they hold in an organization. This right to make decisions is recognized both by the person exercising the right and those over whom that right is exercised.
(3 marks)

  • 20 Marks

BMIS – Mar 2023 – L1 – Q3 – Management and leadership

Differentiates between management and leadership, power and authority, and explains the basic functions of management.

Since being employed by Barry Ltd as Executive Assistant to the Chief Executive Officer about three months ago, you have always heard employees, including some middle-level Managers, use ‘Management’ and ‘Leadership’ interchangeably, which you think is not right.

A staff durbar is scheduled to take place in the next few days, and you have decided to use the platform to educate members of staff on the two concepts as a form of orientation.

Required:
a) Differentiate between ‘Management’ and ‘Leadership’.
(5 marks)
b) Distinguish between ‘Power’ and ‘Authority’.
(5 marks)
c) Explain FOUR (4) basic functions of Management.
(10 marks)

a) Differentiation Between ‘Management’ and ‘Leadership’:

  • Management:
    Management is the process of deciding what an organization wants to do, putting appropriate organizational structures in place, and taking steps to ensure that employees perform their assigned duties and responsibilities to achieve organizational objectives. It involves planning, organizing, directing, and controlling resources to achieve specific goals.
    (2.5 marks)
  • Leadership:
    Leadership, on the other hand, is the act of influencing people to willingly act in a given manner to achieve set group objectives. Leadership is more about inspiring and motivating individuals to follow a vision or goal. It focuses on people and their development, guiding them towards a common objective.
    (2.5 marks)

b) Distinguishing Between ‘Power’ and ‘Authority’:

  • Power:
    Power refers to the ability of one person to influence or direct the behavior of others, regardless of the resistance faced. Power can be derived from various sources, including expertise, relationships, or the ability to reward or punish. It is the capacity to get things done by others.
    (2.5 marks)
  • Authority:
    Authority is the legitimate right to make decisions, give orders, and enforce obedience. It is conferred by the position held within an organization and is recognized by those being influenced. Authority is more structured and formalized compared to power.
    (2.5 marks)

c) Basic Functions of Management:

  1. Planning:
    Planning involves setting goals and determining the best course of action to achieve them. It includes forecasting future conditions, defining objectives, and deciding on the actions necessary to reach those objectives.
    (2.5 marks)
  2. Organizing:
    Organizing is the process of arranging resources and tasks in a structured way to achieve the organization’s objectives. It involves creating a framework that defines the roles, responsibilities, and authority of individuals within the organization.
    (2.5 marks)
  3. Directing:
    Directing is the process of guiding and supervising employees to ensure that they are working towards the organization’s goals. It includes giving instructions, motivating employees, and ensuring effective communication within the organization.
    (2.5 marks)
  4. Controlling:
    Controlling involves monitoring the organization’s performance and comparing it with the set objectives. If there are deviations, corrective actions are taken to ensure that the organization stays on track to achieve its goals.
    (2.5 marks)

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