Pakistan study notes for Matric, Intermediate, B.A, B.COM BSC, M.A, BCS. Free Pakistani Urdu educational school, colleges and University notes.




Beech writes in his book, “In medieval times in Europe authority was thought to stem from the feudal lords and the hundred aristocracies. The peasants at the bottom of there socio economic systems had few rights and no authority. They occupied a decidedly subservient position, which was their expected lot in life. When they were impressed into military commanders were members of the aristocracy, and the chief military leader was usually the king, who possessed absolute authority. Mostly the peasants were illiterate and of a decidedly infer status. Thus the divine right of kings, customs, and tradition dictated obedience of subordinates to orders from above”.


In business organization military-like authority cannot work. A major can get his order compiled by ordering “Do this job, I want it done by noon.” However in a business organization the manager is inclined to say, “I think we can do it by noon, okay let’s start out”. In military the authority is in totalitarian style and in a business organization. It has a democratic approach. In other words, civilian employees like to be asked or requested and not told or ordered.


According to Cyril O Donnel the right authority comes with the ability to own private property. He suggests that the authority delegation moves down the organization chart.


The same case of business organization where authority flows from the owners down the line through all level of managers.


1. Acceptance Authority:

Authority must be accepted by the subordinate to get things done. Its exercise fails if it is not accepted. Acceptance of authority may depend on situation. For instance, there is no way out except to surrender if a robber put his gun on the head. This example puts a question mark on the theory of authority based on ownership of property.

Acceptance theory of authority may be based on attitude towards obedience. In a firm there is no question of choice between obedience and disobedience. For him the choice may be between heartily obedience and reluctant obedience. He will follow order keenly if the superior uses his authority effectively. Hence, according to some authors, the acceptance authority, infact, is a question of leadership.


2. Competence Authority:

It refers to the authority of the person with skills, powers, expertise, and specialization in their work. Fulmer relates his theory to the acceptance theory in the sense that the manager is accepted on the ground of his sheer force of personality, skill, knowledge and other leadership qualities.

Under competence authority, even a big boss will follow the advice and suggestion of an ordinary worker expert in his relevant field. Here the competence authority if informal moving bottom up and based on competence. On the other hand if the manager exercises his authority on his subordinate effectively, it is formal authority moving top-down based on competence.


According to Fulmer, competence authority cannot be characterized by leadership theory because the competence is the very base of authority.


3. Line Authority

This authority is based on the principle of scalar chain in which there is a chain of managers from top to bottom. The details are given separately in this chapter.


4 Staff Authority

An organization has staff whose duty it is to advise. Persons having staff authority cannot issue orders. The detail are given ahead separately in this chapter.



5. Functional Authority

This authority is possessed by those with specialized knowledge but they work with other departmental head. When an accountant works in the sates department rather than accounts department he is said to have functional authority. The details are given separately in this chapter.


6. Top-down Authority

According to the organization structure, authority flow top down from the superior to the subordinate. The superior holds authority because he possesses great knowledge, skill, expertise, education along with important leadership qualities compared with his subordinates. He acquires this authority b virtue of his position in the organization structure. It is passed on to him by his superior who gets it from the chairman. The chairman gets it from the board of directors who get it from shareholders who in turn acquire it from the property they own. This type of flow is natural and necessary to accomplish organization’s goals.


7. Bottom-up Authority

Authority may flow bottom up starting from the subordinate to the superior. One way of this authority coming is in the form of disobedience, slow work or ignorance of the order on the part o subordinates. To exercise his authority the manager has to see their support in getting the work done. Bottom up authority ma be created by the expertise. Special skill and other leadership qualities of the subordinate manager who becomes an essential person in a department, and the superior have to depend on him for the advice and execution of plans. In such a case the subordinate manager has an informal authority. Boss may not always be right but he is always a boss and hence he is always right. Such a situation in which he boss is less competent than this subordinate, the former (the boss) becomes a figurehead manager and the subordinate becomes the real person to pull the strings. In other situations the union leaders overpower the management authority. This is again a matter of informal authority. It may he borne in mind the informal authority is one that doesn’t exist n in the organization structure. William Ouchi, in his theory Z, puts emphasis on advantages of accepting bottom-up authority as practiced in the Japanese management system.


8. Formal Authority

Organization structure provide for formal authority. Any authority created in it is formal authority. It flow top-down from the resident of the company through various levels of management to the front line supervisor. By enjoying formal authority the manager has the right aid power to exert influence on his subordinates to get things done in the best interest of the organization. Formal authority is legitimate authority that moves top-down.


9. Informal Authority

It lies out of the organization’s formal structure, and the organization chart doesn’t show it. It is, however, found in the following situations:


a. When the subordinate is more competent 2nd influential than his superior.

b. In emergency

c. The existence of labor unions.


This authority moves bottom up.


10. Centralized Authority

A manager is said to have centralized authority when he keeps maximum decision making functions with him. He doesn’t delegate to optimum level. Centralization of authority is preferred where economic size of the organization is required, decisions are costly uniform of policy is important, competent managers are not available, and control techniques are not in place.


11. Decentralized Authority

Decentralized refers to delegating authority for decision making to the lower level of management. The more the authority is delegated downward, the greater will be the decentralized organization structure. How much authority should be centralized or decentralized and why is explained separately in this chapter.

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