Substitutional and Essential Authority

Abstract

The article discusses a moral and philosophical view of the limits and the need for managerial authority. The formal (an intrinsic right to direct or command), contractual (source of authority comes from written or implied contract between parties) and acceptance (source of authority comes from subordinates) theories of authority are discussed. In this study, these three theories are seen as complementary rather than contradictory. A fourth view of managerial authority can be found in the writings of Yves Simon. He argues that the source of managerial authority is the essential and substitutional need it serves. Simon's advocates a people-oriented philosophy concerned with the problem of balancing the two forces of authority and human freedom in the business organization.