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Can I read Formal and Real Authority in Organizations on EtoBox?
Formal and Real Authority in Organizations by Philippe Aghion; Jean Tirole is a Economics, Econometrics and Finance article available to read on EtoBox.
What is Formal and Real Authority in Organizations about?
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. ## I. Introduction Over 40 years ago, Herbert Simon defined authority as the right to select actions affecting part or the whole of an organization.' As We are grateful to Oliver Hart and Martin Hellwig for helpful discussio
Who reads Formal and Real Authority in Organizations?
It is typically read by researchers, students, and practitioners in Economics, Econometrics and Finance.
- Author
- Philippe Aghion; Jean Tirole
- Publisher
- University of Chicago Press
- Published
- 1997
- Language
- EN
- Field
- Economics, Econometrics and Finance (Social Sciences)