In many organizations, managers use authority by dividing it into line authority, staff authority and functional authority. These kinds of authority differ according to the kinds of power on which they are based.
Line Authority: Managers with line authority are those people in the organization who are directly responsible for achieving organizational goals. Line authority is represented by the standard chain of command starting with the board of directors and extending down activities of the organization that are carried out. Line authority is based primarily on legitimate power.
Since line activities are identified in terms of the company’s goals, the activities classified as line will differ in each organization. For example, managers at a manufacturing company may limit line functions to production and sales, while managers at a department store, in which buying is a key element will consider the purchasing department as well as the sales department as line activities. When an organization is small, all positions may be line roles. At Nordstrom, associates are given considerable line authority.
Staff Authority: Staff authority belongs to those individuals or groups in an organization who provide services and advice to line mangers. The concept of staff includes all elements of the organization that are not classified as line. Advisory staffs have been used by decision makers from emperors and kings to dictators and parliaments over the course of recorded history.
Staff provides managers with varied types of expert help and advice. Staff authority is based primarily on expert power. Staff offer line managers planning advice through research, analysis and options development. Staff can also assist in policy implementation, monitoring and control in legal and financial matters; and in the design and operation of data processing systems.
As managers expand organizations over time, staff roles are often added to supplement line activities. For example, partners at many law firms are adding staff members to run the ‘business side’ of the firm. The presence of these specialists frees lawyers to practice law, their line function.
The role of staff members – to provide advice and service to line members – implies that staff lacks independent formal authority. In reality, staff departments, especially those responsible for audit functions, may have formal authority over line members within the limits of their function. The right to control activities of other departments as they relate to specific staff responsibilities is known as functional authority. The finance manager of Division A reports through the chain of command to the General manager of Division A, but is also responsible to the vice president for finance at the corporate level. This ‘dotted line’ relationship indicates the functional authority of specialized staff in relation to line managers.
Functional authority is common in organizations. It is necessary in carrying out many organizational activities, both to provide or a degree of uniformly and to allow unhindered application of expertise. Thus, it is based on both legitimate and expert power. The skills required to manage functional authority relationships and the problem arising from those relationships are similar to the skills required to manage dual-boss relationships in matrix organizations.
Functional authority might be common in modern organizations, but it can be difficult to practice. Take the case of Laura Kozol at the General Electric plant in Lynn, Massachusetts, where jet engines are manufactured for small aircraft. As a design engineer, Kozol has a position traditionally associated with staff authority. When Kozol joined the plant staff, she found that engineers designed engines (staff authority) without consulting those who actually produced the parts (line authority). Partly out of frustration, and partly because downsizing at the plant cut out layers of management, Kozol organized an ongoing collaborative process between engineers and production employees. She now exercises functional authority as she works with production employees.