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Cited by 3,046

The DOI matches its Crossref record.

Formal and Real Authority in Organizations

Open access
Aghion, Philippe, Tirole, Jean·1997·Journal of Political Economy
DOI 10.1086/262063
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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.

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Metadata

Authors
Aghion, P., & Tirole, J.
Venue
Journal of Political Economy
Publisher
University of Chicago Press
Published
1997-02
Volume
105
Issue
1
Pages
1-29
ISSN
  • 0022-3808 (ISSN-L)
  • 1537-534X
DOI
10.1086/262063
OpenAlex
W2165717995
Cited by
3,046
References
0
FWCI
105.65
Type
journal article
Language
en
Open access
green

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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.