Discussion on two major concepts of Management

1. AUTHORITY & POWER

2. LEARNING OUTCOME
• How to differentiate between Authority and
Power in organization?
• How to use both rationally?

3. • Do you consider POWER and AUTHORITY as
same?

4. Which is Personal Capacity and which is
Professional Capacity?
(Personal Capacity = Power)
(Professional Capacity = Authority)

5. Differences
BASIS POWER AUTHORITY
Meaning Power means the ability or
potential of an individual
to influence others and
control their actions.
The legal and formal right
to give orders and
commands, and take
decisions is known as an
Authority
What is it? It is a personal trait. It is a formal right, given to
the high officials.
Source Knowledge and expertise Position & office
Hierarchy Power does not follow any
hierarchy
Authority follows the
hierarchy
Resides with Person Designation
Legitimate No Yes

6. • Let's say I'm your manager. I say, "Walden, I'm
giving you distasteful task X, and your
performance of it will be reviewed.”
What it is Power or Authority?

7. MEANING OF AUTHORITY
• Authority is the right to perform or command.
It allows its holder to act in certain designated
ways and to directly influence the actions of
others through orders.
• It also allows its holder to allocate the
organization’s resources to achieve
organizational objectives.

8. MEANING OF POWER
• Power is the possession of authority, control,
or influence by which a person influences the
actions of others, either by direct authority or
by some other, more intangible means.
• A prime source of power is the possession of
knowledge.

9. • A police officer has the _______to arrest an
offender of the law.
(Authority)

10. Types of Power
• Main 2 types:
1. Formal Power ( Coercive, Reward, Legitimate)
2. Personal Power (Expert and Referent)

11. • The VP of Sales who threatens sales folks
to meet their goals or get replaced.
(Coercive Power)
• The supervisor who provides employees
bonus when they meet an objective set for a
project.
(Reward Power)

12. • The CEO who determines the overall direction
of the company and the resource needs of the
company.
(Legitimate Power)
• The Project Manager who is an expert at
solving particularly challenging problems to
ensure a project stays on track.
(Expert Power)

13. • The Human Resource Associate who is known
for ensuring employees are treated fairly and
coming to the rescue of those who are not.
(Referent power)

14. • What is your source of power?
• How effectively do you use your source of
power to meet key goals and objectives?

15. TYPES OF AUTHORITY
3 main types of authority can exist within an
organization:
• Line Authority
• Staff Authority
• Functional Authority

16. LINE AUTHORITY
• The relationship in which a superior exercises
direct supervision over a subordinate.
• The clearer the line of authority, the clearer
will be the responsibility for decision making
and the more effective will be organizational
communication.(SCALAR PRINCIPLE)

17. • It consists of the right to make decisions and
to give order concerning the production, sales
or finance related behaviour of subordinates.

18. STAFF AUTHORITY
• STAFF RELATIONSHIP IS ADVISORY.
• THE FUNCTION OF PEOPLE IN STAFF POSITION
IS TO INVESTIGATE , RESEARCH AND GIVE
ADVICE TO LINE MANAGERS TO WHOM THEY
REPORT

19. • Line or Staff ? What is your Career Goal?

20. • Do you think line and staff should work
together or not?

21. LINE-STAFF MUST WORK TOGETHER
• To maintain the efficiency and effectiveness of
the organization.

22. HOW THEY WORK TOGETHER?
• Management must make sure both groups
understand the organizational mission,
• Must have specific objectives, and
• Realize that they are partners in helping the
organization to reach its objectives.

23. ROLE OF STAFF PERSONNEL
1. The Advisory or Counselling Role:
• staff personnel use their professional
expertise to solve organizational problems.
• The staff personnel are, in effect, internal
consultants whose relationship with line
personnel is similar to that of a professional
and a client.

24. 2. The Service Role:
• Staff personnel in this role provide services
that can more efficiently and effectively be
provided by a single centralized staff group
than by many individuals scattered
throughout the organization.
• This role can probably best be understood if
staff personnel are viewed as suppliers and
line personnel as customers.

25. 3. The Control Role:
Staff personnel help establish a mechanism for
evaluating the effectiveness of organizational
plans.

26. FUNCTIONAL AUTHORITY
• The right delegated to individual or a
department to control specified processes,
practices, policies or other matters relating to
activities undertaken by persons in other
departments.

27. • A company controller is ordinarily given
______ authority to prescribe the system of
accounting throughout the company.
• (Functional)

28. QUIZ-1
1.In which of the following organisation structure,
each specialist is supposed to give his functional
advice to all other foremen and workers
• (A) Line organisation
• (B) Functional organisation
• (C) Line and staff organisation
• (D) All of the above
Ans-B
•

29. 2. Which organisation structure is generally
followed by big steel plants?
• (A) Line organisation
• (B) Functional organisation
• (C) Line and staff organisation
• (D) All of the above
• Ans=C

30. • 3. Authority always flows from
• (A) Superior to subordinate
• (B) Subordinate to superior
• (C) Both ‘A’ and ‘B’
• (D) None of the above
Ans- A

31. 4.The following is not a type of organisation
structure
• (A) Line organisation
• (B) Functional organisation
• (C) Line and staff organisation
• (D) Flexible organisation
Ans= D

32. 5. Which of the following is not true with regard to functional
authority?
(a) Functional authority is the authority staff members have over line
members within the limits of their functions
(b) Functional authority has the same effect as line authority but it
doesn’t have the right that line authority has, to punish violations
or deviations in order to ensure compliance
(c) Functional authority is limited to those areas where a staff
member has some technical competence
(d) The use of functional authority should be restricted to the
procedural aspects of a function
(e) Functional authority is in sync with the principle of unity of
command.