In an organization, authority refers to the ability to make decisions and act on strategic priorities. An adaptive company needs to consider how authority will be created and distributed through reporting relationships, which individuals will have command or advising authority to subordinates, and which activities will contribute directly to making and selling the company's products and services.

Chain of Command

Degree of Centralization

Chain of command refers to the line of authority in a company. Those individuals with the most authority are located at the top of the chain of command, while sufordinates occupy lower levels of authority. It is important for organizations to create unity of command for subordinates so that they only report to one individual and can focus their work on how their positions contribute to the strategic priorities of the company.

Select the best response to the following questions.

If a manager assigns responsibility for a task to a subordinate who is then able to command those who are under the authority of the manager, what takes place?

Delegation

Centralization

Standardization

Decentralization

Select the best response to the following questions.

Which type of decision making occurs when individuals in an organization are empowered?

Decentralization

Standardization