Ace's Implied Authority in Business Management

What are the implied authorities of Butler as a manager in Ace's retail business? Which actions are within Butler's implied authority? Butler has the implied authority to do all of the following, except:
  • a. Purchase inventory for Ace's business
  • b. Sell Ace's headquarters and business
  • c. Pay Ace's business debts
  • d. Hire or discharge Ace's business employees

Butler does not have the implied authority to sell Ace's headquarters and business. The correct option is b. Sell Ace's headquarters and business.

Understanding Implied Authority in Business Management

Implied authority refers to the authority that is not expressly granted but is reasonably necessary to carry out the responsibilities of a particular role or position. In the case of Butler managing Ace's retail business, implied authority allows Butler to perform certain actions on behalf of Ace.

Actions Within Butler's Implied Authority:

a. Purchase inventory for Ace's business:

Butler has the implied authority to purchase inventory for Ace's business. This is because managing a retail business often involves procuring merchandise to be sold.

b. Sell Ace's headquarters and business:

Butler does not have the implied authority to sell Ace's headquarters and business. This is because selling such significant assets typically requires explicit authorization from the owner, Ace.

c. Pay Ace's business debts:

Butler has the implied authority to pay Ace's business debts. Managing a business includes managing financial obligations, and paying debts is considered a necessary aspect of business management.

d. Hire or discharge Ace's business employees:

Butler has the implied authority to hire or discharge Ace's business employees. Managing a business often involves making decisions regarding personnel and staffing.

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