Formal and Real Authority in Organizations

Formal and Real Authority in Organizations

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Formal and Real Authority in Organizations

dc.contributor.author	Aghion, Philippe
dc.contributor.author	Tirole, Jean
dc.date.accessioned	2010-11-15T15:14:53Z
dc.date.issued	1997
dc.identifier.citation	Aghion, Philippe, and Jean Tirole. 1997. Formal and real authority in organizations. Journal of Political Economy 105(1): 1-29.	en_US
dc.identifier.issn	0022-3808	en_US
dc.identifier.uri	http://nrs.harvard.edu/urn-3:HUL.InstRepos:4554125
dc.description.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.	en_US
dc.description.sponsorship	Economics	en_US
dc.language.iso	en_US	en_US
dc.publisher	University of Chicago Press	en_US
dc.relation.isversionof	doi:10.1086/262063	en_US
dash.license	LAA
dc.title	Formal and Real Authority in Organizations	en_US
dc.type	Journal Article	en_US
dc.description.version	Version of Record	en_US
dc.relation.journal	Journal of Political Economy -Chicago-	en_US
dash.depositing.author	Aghion, Philippe
dc.date.available	2010-11-15T15:14:53Z