Hierarchy of Authority
The authority rests with the individual in the organization.
The degree and strength of authority depends on the level at which at person is
holding position. The authority is measured on the basis of command on control
of resources, the risk of business, and the decision making power to manage the
risks and rewards. When the authority s distributed in a vertical order in terms
of levels, the organization is built on the principle of hierarchy of authority.
The effectiveness of the authority is based on the span of control, i.e., the
number of persons being managed and controlled by a person.
Depending on the organization, and business, the span may differ from
four to seven. The span outside this
range has proved to be unproductive and inefficient.
