Formal and Real Authority in Organizations
Philippe Aghion and
Jean Tirole
Scholarly Articles from Harvard University Department of Economics
Abstract:
This paper develops a theory of the allocation of formal authority (the right to decide) and real authority (the effective control over decisions) within organizations, and it illustrates how a formally integrated structure can accommodate various degrees of "real" integration. Real authority is determined by the structure of information, which in turn depends on the allocation of formal authority. An increase in an agent's real authority promotes initiative but results in a loss of control for the principal. After spelling out (some of) the main determinants of the delegation of formal authority within organizations, the paper examines a number of factors that increase the subordinates' real authority in a formally integrated structure: overload, lenient rules, urgency of decision, reputation, performance measurement, and multiplicity of superiors. Finally, the amount of communication in an organization is shown to depend on the allocation of formal authority.
Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1495)
Published in Journal of Political Economy -Chicago-
Downloads: (external link)
http://dash.harvard.edu/bitstream/handle/1/4554125/Aghion_FormalRealA.pdf (application/pdf)
Related works:
Journal Article: Formal and Real Authority in Organizations (1997) 
Working Paper: Formal and Real Authority in Organizations (1994)
Working Paper: Normal and Real Authority in Organizations (1994)
Working Paper: Formal and Real Authority in Organizations (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:4554125
Access Statistics for this paper
More papers in Scholarly Articles from Harvard University Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Office for Scholarly Communication ().