Functional authority – Definition:
Functional authority is permission to issue directions to people not under line supervision. Such directions deal with specified activities or certain aspects of a company.
Examples of functional Authority:
Example 1. The sales production manager may stipulate the methods of presenting new products and the time the products are to be introduced.
Example 2. A production planning manager may pass orders in matters of personnel problems, production planning, use of safety devices, and quality control; or a finance executive may be authorized to acquire from other departments the budgetary reports and other records.
Example 3. An industrial engineer may select equipment and prescribe the tools and the methods to be used in production operations.
In all these examples, the executive with functional authority does part of the planning activity. He may prescribe policy, set up methods, or determine the time when activities are to be undertaken. In doing so, he is saying how the activities are to be performed. The line executive, on the other hand, is responsible for seeing that the instructions given by the functional authority as well as from the executive are carried out.
However, it should be noted that extensive grant of functional authority may seriously damage the basis of line authority, i.e., the unity of command. The disadvantages are as follows.
Disadvantages of functional authority:
1. Functional authority exercised by several people in an organization:
If several different people exercise functional authority over a given operative executive, he may be swamped by specialized instructions. A branch manager, for instance, may find it almost impossible to carry out all the directions received from the chief accountant, maintenance manager, warehouse manager, sales promotion manager, credit manager, personnel manager, and public relations manager, if each of these home office experts has a wide degree of functional authority. Moreover, under such circumstances, it is quite possible that some of the instructions may be inconsistent with others in actual operation.
2. Heavy use of functional authority:
The effectiveness of line supervisors may be weakened by a heavy use of functional authority. As more and more instructions come from the functional authority, the status of the line boss may be undermined. In the eyes of his subordinates, the boss has become merely a go between, and they will turn directly to the specialists for guidance.
3. Functional authority may lead to inflexible administration
Functional authority sometimes leads to autocratic and inflexible administration. The functional specialist may become narrow in his viewpoint and insist that his plans be followed even though they are not well suited to a specific local situation. In a large concern, he is likely to be distant from the scene of operations and reluctant to make modifications in his generalized plan”.
Functional authority should, therefore, be granted only when it is essential. The good practice is to minimize this to a line or staff position; and provision should be made to see that it is not arbitrary. Further, it should be established by prior agreement among the departments affected, preferably in written procedures that are approved by the executive officer.
Situations where functional authority works well
Functional authority works well in certain situations such as:
- when only a minor aspect of the total operating job is covered;
- when technical knowledge of a type not possessed by the operating executives is needed; and
- when consistency of action in several departments is important.
Many times, cases of composite relationships are available, when a single executive has a wide variety of relationship, depending upon the subject and who the other person is, for example, a personnel manager;
- have line authority over the employment office, cafeteria, and other employee service operations;
- exercises functional authority in respect of compensation ranges, length of vacation, dismissal procedures; and
- provides much constructive advice regarding , training, promotions, motivation, etc in a staff capacity.