Functional authority is the right which is delegated to an individual or a department to control specified processes, practices, policies, or other matters relating to activities undertaken by persons in other departments. If the principle of unity of command were followed without exception, authority over these activities would be exercised only by their line superiors.
But numerous reasons â€“ including a lack of special knowledge, a lack of ability to supervise processes, and the danger of diverse interpretation of policies explain why these managers are occasionally not allowed to exercise this authority. In such cases, the line managers are deprived of some authority. It is delegated by their common superior to a staff specialist or to a manager in another department. For example, a company controller is ordinarily given functional authority to prescribe the system of accounting throughout the company, but this specialized authority is really a delegation from the chief executive.
Functional authority is not restricted to manager of a particular type of department. It may be exercised by line, service, or staff department heads, although more often by the latter two because service and staff departments are usually composed of specialists whose knowledge becomes the basis for functional controls.
Delegation of Functional Authority
One can better understand functional authority by thinking of it as a small slice o the authority of a line superior. A corporation president, for example, has complete authority to manage a corporation, subject only to limitations placed by such superior authority as the board of directors, the corporate charter and by laws, and government regulations.
In the pure staff situation, the advisers on personnel, accounting, purchasing, or public relations have no part of this line authority, their duty being merely to offer counsel. But when the president delegates to these advisers the right to issue instructions directly to the line organizations that right is called functional authority.
The four staff and service executives have functional authority over the line organization with respect to procedures in the fields of accounting, personnel, purchasing, and public relations. What has happened is that the president, feeling it is unnecessary to clear such specialized matters personally, has delegated line authority to staff assistants (or managers) to issue their own instruction to the operating department. Of course, subordinate managers can use the same device, as in the case of a factory superintendent who delegates to cost, production control, and quality control supervisors the functional authority to prescribe procedures for the operating supervisors.