Table of Contents
- How does authority work within the company?
- Where do sources of authority come from?
- What are the types of authority in a company?
- What to read next
What’s it: Authority is legitimate power, given by the rules and recognized by other parties. It allows one to demand action and expect obedience from others. For example, suppose a company gives a manager authority. In that case, it gives him the right to order others to act in the desired way. And it gave him the power to make important decisions.
Authority comes with responsibility and accountability. For example, the company asks the manager to be responsible for every decision and accept the possible consequences.
How does authority work within the company?
Companies give authority to managers to carry out their roles. It enables them to make decisions, issue orders, and allocate resources to achieve the results desired by the organization.
Such authority is essential. Subordinates will not obey them if there is no such legitimacy power. And finally, the company cannot run without this authorization.
How authority is distributed within the organization varies between companies. For example, it depends on the organizational structure adopted. Furthermore, the structure is also usually related to company size.
Take small business as a case. Authority and decision-making power are usually concentrated in a few hands. Sole proprietorships, for example, rely on owners to make all decisions.
Then, as the business grows, the organization becomes larger and more complex. As a result, taking decisions under one person is impossible. As a result, a large company will lead to more authority being distributed to several lower positions. So, there is a need to delegate authority to more people to make decisions as the company grows.
In a large company, the authority will be tiered and form a hierarchy, where each level will have different authority. And when adopting a decentralized structure, companies give more authority to lower positions.
But, otherwise, under a centralized structure, the power is more under the higher level. Top managers take on a significant role as decision-makers, leaving little – or no – delegation to lower levels.
Why is the hierarchy of authority important?
Authority is tiered. It gets higher if the employee occupies a higher position in a hierarchical structure.
Such a hierarchy is designed to make the organization run effectively. And, it doesn’t just benefit the company. But, it is also positive for employees.
Authority allows managers to direct and direct their subordinates to work towards organizational goals. Thus, it allows everyone to move in the same direction.
Meanwhile, the hierarchy provides a clear career path for subordinates, which position they can occupy with their current career. Each position requires different competencies, whereas a high level requires a higher level. Thus, building a hierarchy of authority allows the company to grow with competent staff in managerial fields.
Then, the hierarchy is also a method to maintain managerial integrity. When a person becomes a manager, he must prove himself competent. Or, if not, he will be replaced.
Where do sources of authority come from?
Weber’s three types of authority:
Traditional authority comes from tradition and custom. It exists because it has been accepted and passed down from generation to generation for a long time. In other words, it was due to bloodline. Respect and obedience to the royal family are examples. Another example is legitimacy to rich families.
Charisma relates to one individual’s ability to influence others with his personality. Therefore, people respect and obey him because he has great charm and personality qualities.
Legal-rational means not being attached to the person but to the position. It is also called bureaucratic or legal authority because it is legitimized through written rules and regulations.
For example, companies give authority to managers to make decisions. And, the rules in the company require subordinates to comply. But, when they no longer serve as managers, that authority is lost. Therefore, legitimacy is not attached to the person but to the position they fill.
What are the types of authority in a company?
Authorities fall into the following three categories:
- Line authority
- Staff authority
- Functional authority
Line authority. It flows along the chain of command and provides immediate legitimacy. An example is between a manager and his subordinates. He supervises them directly and has the right to give orders and have his subordinates carry out decisions. It is essential for an effective organization, where he can get them to achieve the goals and targets set for them.
Staff authority. It does not confer the right to govern but rather provides advice and support services to other departments. An example is an inherent authority in the legal department. The legal manager advises other departments without forcing them to take the desired action.
It is also commonly found in other departments such as human resources, procurement, and technology, where they act as support activities in the value chain.
Functional authority. It allows an individual to give orders to others outside his department.
For example, a manager is appointed to oversee a project. Say, he is currently working for the research and development department.
The company gives him the right to appoint the team he thinks is appropriate. So, for example, he called on employees in the marketing department to join in to provide insight into customer needs. In addition, he called people in the finance department to oversee the project.
Another example is the finance department staff. They may also have the authority to request supporting documents to prepare financial statements.
What to read next
- Levels of Hierarchy: Definition and Brief Explanation
- Chain of Command: Importance, Element, Advantages
- Span of Control: Importance, Types, Advantages, Disadvantages
- Delegation in Management: How it Works, Advantages, Disadvantages
- Accountability: Importance, Examples, Components
- Centralization: Importance, How it Works, Determinants, Pros, Cons
- Decentralization: Importance, Advantages, Disadvantages
- Bureaucracy: Importance, How it Works, Advantages, Disadvantages
- Delayering: Importance, How it Works, Strengths, Disadvantages
- Downsizing: Importance, Reason, Type, Pros, Cons
- Authority: How It Works, Sources, Types, Examples
- Organizational Chart: Importance, Features, and Types