Authority means power or right. In the context of a business organization it implies the right to order or command. This authority is given to the superiors to accomplish the given task. For example an executive may be asked to produce certain goods. In that case he will be given the necessary authority to purchase the necessary raw materials, engage or hire people. It would also be necessary to give him authority to take assistance of some other people. In technical terms it is called delegation of authority. For example, Plant Manager will assign to the Production Manager the necessary authority to get the goods produced by purchasing raw materials, hiring lab our, purchasing machinery etc.
Following are the various definitions :
- According to Kountze, O’Donnell and Weinrich, “Authority is the power to command, to act or not to act in a manner deemed by the possessor of the authority to further enterprise or departmental purpose.”
- In the words of Franklin G. Moore, “Authority is the right to decide and the power to act to carry out decisions.”
- According to Louis A, Allen, “Authority is the sum of powers and right entrusted to make possible the performance of the work assigned.”
Thus, Authority is necessary to accomplish the task assigned. “No authority no responsibility is the proverb which explains the significance of authority.
Authority should commensurate with the responsibility i.e., it should be adequate enough to get the work done. In the absence of authority, the executive or the manager cannot accomplish his job or get his job done.
Sources of Authority
There are various theories which explain the sources of authority. The important theories are as follows:
The Formal Authority Theory-
This is the most popular theory. According to this theory authority originates at the top of an organization and flows downward to the subordinates. For example, in a company the shareholders are the owners and they delegate their authority to the Board of Directors. The Board of Directors in turn delegate their power to the Chief Executive-Managing Director. The Chief Executive to the departmental heads and so on.
The Acceptance Theory:
According to this theory authority is effective only if it is accepted by the subordinates. The degree of effective authority possessed by a manager is measured by the willingness of subordinated to accept the orders and command of the superiors. “An individual will accept and exercise authority if the advantage accruing to him from accepting plus the disadvantage accruing to him from not accepting exceed the advantage to him from not accepting plus the disadvantages accruing to him from accepting.” According to this theory authority cannot be imposed. It has to be accepted by the others. Thus, an authority’s order will be accepted or not will depend upon its positive and negative consequences.
The Competence Theory:
According to this theory authority originates from the competence of the manager i.e., his personal qualities skill and experience etc. The employees accept the order of a person because of his competence. Since he possesses special skill and experience, people come to him for advice. According to this theory authority is in the nature of power. Just as power originates from influence, similarly authority flows from competence of the person concerned.
Characteristics of Authority
- The authority empowers the manager to direct his subordinate to act in right direction.
- Authority is lawful or legitimate right.
- Authority facilitates execution.
- Authority provides efficient leadership.
- Authority is objects but its execution is subjective.
- Authority cannot be absolute.
- Authority is supreme.
- Authority is the key to the manager’s job.
- Authority helps in taking decisions.
Limitation of Authority
The following are the limitations on the authority of a manager.
The most important source of authority is legal. Similarly, it is also the most important limitation. While an organization is created it is essential to define its powers i.e., to put restrictions on its authority. It is necessary in public interest. It is remarked that power or authority corrupts and absolute power corrupts absolutely. A manager must exercise his authority within the limits. of law set by various laws. For example, the Companies Act, 1956 the Factories Act, 1948 the Payment of Wages Act. 1936 the Pollution Control Act, 1974 and so on.
Physical capacity of a manager is limited, so also his mental capacity. You might have observed in the chapter on span of management that a manager can control only-six subordinates efficiently and effectively.
Social constraints also put restrictions on manager’s authority. Social constraints include social customs, traditions, beliefs, creeds, etc.
Economic limitations also limit authority of a manager. For example a manager has to work within the framework set by budgetary control and standard costing.
Level of organization-
Managers at higher levels have greater authority as compared to those at lower levels. The authority goes on decreasing with the fall in the level of the executive.
- Planning- Process, Techniques & Limitations
- Goal Displacement & Goal Distortion
- Management by Objectives (M.B.O)- Process, Merits, Demerits etc.
- Decision Making- Meaning, Process, Features etc.
- Group Decision-making : Meaning, Merits, Demerits
- Types of Decisions in decision making
- Organization- Meaning, Definition, Significance
- Committee Organisation- Meaning, Types, Drawbacks
- Formal & Informal Organization- Merits, Demerits, Difference etc.
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