Authority in Business: Concept Explained

Authority is characterized as the institutionalized and legal power inherent in a job role, or position that allows the holder of the job to perform his or her responsibilities effectively. It is assigned officially and legally. Authority means a particular authorization obtained from a person's higher officer and based on which a person is entitled to do the work in an organization. It is important for administrative functions. Without authority, no person can carry out his duties with full responsibility.

This includes the right to monitor a situation, commit funds, issue orders, and demand them to be obeyed. It is followed by accountability for one's acts and failures to execute actions. Additionally, true authority often means that the authority is recognized by the aim.

Concept of Authority

• The secret to managerial employment is authority. Authority is the cornerstone of the organization to the degree that an organization is defined as a system of relationships between authorities. Authority has a variety of meanings in daily life; it may refer to an individual with superior expertise and skills in a specific field; it may apply to certain officials such as a police commissioner, a university vice-chancellor, or a company's managing director; the word 'registered dealer' also has a different connotation, that of a legally-constituted relationship. However, for management purposes, these definitions of authority are not sufficient. The Authority shall be allowed to make a decision on a matter given or assigned by the superiors. Taking decisions is not sufficient. The decisions are made by those given the responsibility of enforcing the said decision. Authority here becomes a right to order and even to execute the decision.

In short, the Authority can be defined as:

• A legitimate right to a decision that may be given or assigned,

• Entitlement to command,

• The right to see that the decision is implemented properly and honestly

Characteristics of Authority

• Basis of Getting Things Done: Authority grants the right to do something in an organization and to control the actions of the other employees of the organization. It immediately contributes to the completion of certain activities for the achievement of the stated goals.

• Legitimacy: Authority means a legal right open to superiors (within the company itself). This type of right exists because of the practice of authenticity, custom, or norms agreed upon in an institution. Based on an organizational hierarchy, the right of a manager to influence the behavior of his subordinates is granted to him.

• Decision Making: A prerequisite of authority is decision-making. The manager may order his subordinates to behave or not to act. The manager makes this form of decision concerning the operation of an office.

• Implementation: Implementation affects the manager's personality. The subordinates or group of subordinates should obey the manager's orders as to the execution of decisions. One manager's personality factor may vary from another manager.

Features of Authority:

• It is an individual's legitimate right.

• It enables staff to be determined by the placeholder.

• This means the right to seek compliance.

• It is practiced in a certain manner to control the actions of subordinates.

• It moves within the organization from top to bottom.

• It is the ultimate organizing power, and it unites the various individuals who work in the company.

• It is used to accomplish organizational goals.

• Differentiating authority from power. Power is referred to as the ability to influence the attitude and behavior of an individual whereas authority is particular authorization obtained from the higher end.

Elements of Authority

There are 5 elements of authority which are explained below.

• Usage of Power: In other words, there is a power where there is an authority based on which the authorized person gives orders and instructions to other persons under his/her jurisdiction.

• Influential Personality: If the power is assigned to a person of influential personality, he can make successful use of these powers, easily because his orders are readily accepted by the subordinates.

• Performance: An essential aspect of authority is the need for the exercise of authority control. Such success can take place in various ways, such as with the application and issuing orders in writing, etc.

• Effective Leadership: The individual with authority must be an effective leader so that his subordinates can be guided and his subordinates can obey his instructions in turn.

• To Influence the Subordinates: The person having authority must have a quality impact on his subordinates for the successful exercise of authority to be able to recognize and comply with his orders

Relationship Between Authority and Responsibility

Authority can be defined as the legal right of a person or superior to command his subordinates.  On the other hand, accountability refers to the duty of an individual to carry out his performance as per the company standards. The direction of the flow of authority is from the superiors to subordinates. During this flow of authority, subordinates receive orders and instructions from their superiors on the nature and time frame to complete the task. It is only by the use of the authority that a manager exercises control and demands accountability from his subordinates. 

For example, it is the marketing manager who directs the sales supervisor for the sale of a specified number of units within a pre-scheduled deadline (such as in a month/ yearly goals). If the set standards are not satisfactorily accomplished, it is the marketing manager who will be accountable to the chief executive officer. This example illustrates how authority flows from top to bottom and why responsibility flows from bottom to top. Accountability is a result of responsibility and responsibility in turn is achieved through authority. Therefore, authority and accountability always go hand in hand.

Importance of Delegation

In a practical sense, we know that a manager alone cannot perform all the tasks assigned to him. If he wishes to achieve his targets, it is unavoidable that he delegates his authority. Delegation of authority here means division of authority and powers downwards to the subordinate and workers down the power structure. Delegation basically involves sharing work with someone else, usually a group of people to do parts of the manager's job.

Delegation of authority is a structural way of relieving the managerial position of work beyond his capacity and hence becomes an important tool in organization function. If one looks close enough, it is through delegation that a manager/ superior multiplies himself by dividing/multiplying his work with the subordinates.