Line authority, the most fundamental authority within an organization, reflects existing superior–subordinate relationships. It consists of the right to make decisions and to give orders concerning the production-, sales-, or finance-related behavior of subordinates. In general, line authority pertains to matters directly involving management system production, sales, and finance and, as a result, the attainment of objectives. People directly responsible for these areas within the organization are delegated line authority to assist them in performing their obligatory activities.¹⁷

Whereas line authority involves giving orders concerning production activities, staff authority consists of the right to advise or assist those who possess line authority as well as other staff personnel. Staff authority enables those responsible for improving the effectiveness of line personnel to perform their required tasks. Examples of organization members with staff authority are people working in the accounting and human resource departments. Obviously, line and staff personnel must work together closely to maintain the efficiency and effectiveness of the organization. To ensure that line and staff personnel do work together productively, management must make sure that both groups understand the organizational mission, have specific objectives, and realize that they are partners in helping the organization reach its objectives.¹⁸

Size is perhaps the most significant factor in determining whether an organization will have staff personnel. Generally speaking, the larger the organization, the greater the need and the ability to employ staff personnel. As an organization expands, it usually needs employees with expertise in diverse areas. Although small organizations may also require this kind of diverse expertise, they often find it more practical to hire part-time consultants to provide this expertise as needed than to hire full-time staff personnel, who may not always be kept busy.

Figure 9.2 shows how line–staff relationships can be presented on an organization chart. The plant manager on this chart has line authority over each immediate subordinate—the human resource manager, the production manager, and the sales manager. However, the human resource manager has staff authority in relation to the plant manager, meaning the human resource manager possesses the right to advise the plant manager on human resource matters. Still, final decisions concerning human resource matters are in the hands of the plant manager, the person holding line authority. Similar relationships exist between the sales manager and the sales research specialist, as well as between the production manager and the quality control manager.

Harold Stieglitz has pinpointed three roles that staff personnel typically perform to assist line personnel:¹⁹

1. The advisory or counseling role—In this role, staff personnel use their professional expertise to solve organizational problems. The staff personnel are, in effect, internal consultants whose relationship with line personnel is similar to that of a professional and a client. For example, the staff quality control manager might advise the line production manager on possible technical modifications to the production process that would enhance the quality of the organization’s products.

2. The service role—Staff personnel in this role provide services that can more efficiently and effectively be provided by a single centralized staff group than by many individuals scattered throughout the organization. This role can probably best be understood if staff personnel are viewed as suppliers and line personnel as customers. For example, members of a human resource department recruit, employ, and train workers for all organizational departments. In essence, they are the suppliers of workers, and the various organizational departments needing workers are their customers.

3. The control role—In this role, staff personnel help establish a mechanism for evaluating the effectiveness of organizational plans. Staff personnel exercising this role are representatives, or agents, of top management.

These three are not the only roles performed by staff personnel, but they are the major ones. In the final analysis, the roles of staff personnel in any organization should be specially designed to best meet the needs of that organization. In some organizations, the same staff people must perform all three major roles.

Most management practitioners readily admit that a noticeable amount of organizational conflict centers around line–staff relationships.²⁰ From the viewpoint of line personnel, conflict is created because staff personnel tend to assume line authority, do not give sound advice, steal credit for success, fail to keep line personnel informed of their activities, and do not see the whole picture. From the viewpoint of staff personnel, conflict is created because line personnel do not make proper use of staff personnel, resist new ideas, and refuse to give staff personnel enough authority to do their jobs. In some organizations, the distribution and use of authority is a matter requiring careful negotiation.²¹

Staff personnel can often avert line–staff conflicts if they strive to emphasize the objectives of the organization as a whole, encourage and educate line personnel in the appropriate use of staff personnel, obtain any necessary skills they do not already possess, and deal intelligently with resistance to change rather than view it as an immovable barrier. Line personnel can do their part to minimize line–staff conflict by using staff personnel wherever possible, making proper use of the staff abilities, and keeping staff personnel appropriately informed.²²

Functional authority consists of the right to give orders within a segment of the organization in which this right is normally nonexistent. This authority is usually assigned to individuals to complement the line or staff authority they already possess. Functional authority generally covers only specific task areas and is operational only for designated amounts of time. Typically, it is given to individuals who, in order to meet responsibilities in their own areas, must be able to exercise some control over organization members in other areas. Wise leaders know how to delegate functional authority properly to ensure optimal productivity.²³

Michael Schlotman serves as chief financial officer (CFO) of national supermarket chain Kroger Company. Schlotman’s role as CFO includes functional authority, with his primary responsibility involving the monitoring of responsibility in Kroger’s financial system. To do so requires having appropriate financial information continually flowing in from various segments of the organization. The vice president for finance, therefore, is usually delegated the functional authority to order various departments to furnish the kinds and amounts of information he or she needs to perform an analysis. In effect, this functional authority allows the vice president for finance to give orders to personnel within departments in which he or she normally cannot give orders.

From this discussion of line authority, staff authority, and functional authority, it is logical to conclude that although authority can exist within an organization in various forms, these forms should be used in a combination that will best enable individuals to carry out their assigned responsibilities and thereby best help the management system accomplish its objectives. When trying to decide on an optimal authority combination for a particular organization, managers should be aware that each type of authority has both advantages and disadvantages. The organization chart illustrated in Figure 9.3 shows how the three types of authority could be combined for the overall benefit of a hospital management system.²⁴