Question

In: Accounting

what is like to be authority in business and personal level?

what is like to be authority in business and personal level?

Solutions

Expert Solution

Authority

Authority - in context of a business organization, authority can be defined as the power and right of a person to use and allocate the resources efficiently, to take decisions and to give orders so as to achieve the organizational objectives. ... The top level management has greatest authority.

For example:-

  1. A manager might have the authority to make a hiring decision, decide to spend a certain amount of money on something, choose a supplier, set deadlines and priorities, or sign a purchase order.
  2. A secretary might have the authority to sign certain documents, schedule meeting rooms, or issue purchase orders for routine restocking of office supplies.
  3. Salespeople might have the authority to offer certain specific discounts to customers.

Henri Fayol, who designed the administrative theory of 14 principles of management, defined authority as ‘the right to give orders and exact obedience‘.He also recognized that any official authority vested in the job was often ineffective.

Business level.

  • He further added that the presence of leadership qualities and traits like intelligence, experience, etc., usually, enhance authority. However, as an important key to the manager’s job, authority is the power to command others and decide to act or refrain from acting to achieve the organization’s goals.
  • A manager needs authority. It makes his position real and gives him the power to order his subordinates and get them to comply. When there is a chain of superior-subordinate relations in an organization, it is the authority which binds and provides a basis for responsibility.
  • James Mooney specified that coordination is the primary principle of an organization. Therefore, it must have its own principle and foundation in Authority or the supreme coordinating power.
  • Coordination is the all-inclusive principle of organization, it must have its own principle and foundation in Authority or the supreme coordinating power.
  • Always, in every form of organization, this supreme coordinating authority must rest somewhere, else there would be no directive for any truly coordinated effort. Without authority, there will be no relations between subordinates and superiors and the organization will be in chaos

Personal level

  • The authority that a manager enjoys due to his position is the official authority or authority of position. Apart from the official authority, a manager might influence the behavior of other people in the organization.
  • It doesn't necessarily travel in the halls of power, although it might.
  • Personal authority is the trust and earned right to speak into someone's life. Positional authority may get results in the short run, but only personal authority will create trust, loyalty, and a deep connection to your vision and values.
  • EXAMPLE:-When I was in the Army, I learned this is even true in the military where members literally wear their rank on their sleeve. I showed up in the Army as a 26 year-old Captain/psychologist in charge of the mental health clinic. I had 5 enlisted soldiers reporting to me, most of whom were older than me. They didn’t respect me at first just because I was a Captain. They respected my rank and position. You have to salute soldiers who have a higher rank, but you don’t have to respect them as people just because of their rank. Sure, they saluted me and did what they were supposed to do for the most part.

This is the personal authority of the manager. A manager with both official and personal authority is very effective. Authority is not unlimited power and consists of specific rights and permissions to act for the organization in specified areas.


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