Introduction
It is important to note that the terms authority and power are often used interchangeably, and some might perceive them as synonymous words. Although there is a certain overlap in the context of the underlying notions, one should be aware that there are critical distinctions and differences between the concept of power and the definition of authority. The given comparative analysis of these terms will primarily focus on substantiating the fact that power is one’s ability to influence, control, and direct others, whereas authority is also one’s ability to influence, but there is a key element of legitimacy.
Understanding Power and Authority
On the one hand, the notion of power is a challenging term to define and determine clearly, but at its core, power is one’s ability to influence, control, and direct others whether the context involves people, organization, institutions, markets, states, or even countries. On the other hand, authority inherently implies the presence of power since one cannot have authority without the latter. Although there are exceptions to the previous statement, which will be explored later, in general, authority is based on the perceived legitimacy of one power over certain groups, individuals, or functions. One can have the power to affect others, such as communities and cities, without authorities, such as the wealthy families controlling certain city management directives without holding official city governance positions or having the support of the public (Pardo & Prato, 2016). For example, in a country with a corrupt government, power can be held by the member of the families of the public officials, despite the fact that there are no political leaders or heads of divisions and departments. Another example might include a highly wealthy individual with connections in government, who is a mere citizen and businessperson, which means that he or she should have equal influence under principles of democracy.
Subsequently, power is critical for one to have authority, and the latter is a combination of power and perceived legitimacy. For example, a president of a nation has both power and authority to make a critical decision when governing. However, legitimacy sets a set of boundaries in which the allocated power can be exercised since presidents require public supports and congress’s approval to pass key bills and legislations. Due to the privileges, which come with such a position, such an individual can also abuse his or her power outside the predetermined boundaries, which makes these actions possible due to the presence of the power factor, but the lack of legitimacy deprives them of authority. In rare cases, a person might have authority without actual power. For instance, the recent political turmoil in Afghanistan is a prime example, where the president of the country, Ashraf Ghani, had legitimate authority as the nation’s leader but had no power over his rivals, which is why he had to flee the city (Walsh, 2021). In other words, authority always requires some degree of power for it to be functional.
Although the presented examples mainly focused on either extreme and high-ranking cases, the same principles apply in organizational and individual decision making. Power is an essential fuel for making authority to be able to operate and have an impact, and the former can be exercised outside the context of authority, which makes it illegitimate. However, authority cannot be exercised without power, and in most cases, authorization is the very process, which grants one power. For instance, it is stated that “the extent that leadership is a relationship resting on voluntary obedience, it is through a process of authorization that leaders obtain their power” (Joullie et al., 2021, p. 1). In other words, despite leadership relying on voluntary obedience, the core of leadership is still reliant on one’s authority, which grants him or her power to lead.
Power in Decision Making
It is important to note that the performance of any organization is directly tied to the decisions made by the management and leaders. However, one should also understand that decisions can be considered as plans and abstract ideas, which need to be imprinted in practice through implementation and action. Therefore, for a decision to have an effect, the decision maker needs to have power over the elements upon which he or she is deciding on. For example, an adult person can make a decision to become taller or reverse aging on will, but these decisions are nonsensical and have no practical basis since such an individual need to have power over his or her biological mechanisms to regulate and control functions driving the desired changes. Such cases of dissonance between decision making and power are prevalent in less extreme cases, whether the context involves organizations or individuals. Therefore, decisions need to be grounded on the powers one can or might have over making them have an effect and practical influence. In other words, power must be present to a certain extent for decisions to be effective.
Moreover, the key principle of power is in the ability to influence and control others, which is a cornerstone of decisions manifesting themselves in practice. Since any decision requires some form of effort and action from an agent, power plays a critical role in the process of realizing decisions in the real world. Thus, decisions made without power behind them, regardless of whether or not one has authorized positions to do so, these decisions will not be implemented. In other words, power is essential for decisions to become actions. The structural elements of power are interconnected interest and will. Power in any of its manifestations is a conscious embodiment through the will of certain interests. Proceeding from this, scientists distinguish private and public authorities as realizing, respectively, private and public interests. Both public and private power act as varieties of social power. In its most general form, social power is understood as the ability of someone’s will to exert a decisive influence on the behavior of another subject. Power gives integrity to society, serves as the most important factor in organizing order. Under the influence of power, social relations become purposeful, acquire the character of controlled and controlled ties.
Authority in Decision Making
One should be aware that authority is a legitimate provision of power to a person or group. For instance, a CEO of a corporate enterprise has authority over his or her company, which grants him or her power to make the necessary decision, which influences the processes and the overall state of the organization. It is stated that “compliance to authority is an integral part of how organizations operate” (Karakostas & Zizzo, 2016, p. 67). In other words, if there is noncompliance to the authority of management or leadership, such authority has no power since the decisions have no effect. Authority is defined as “a capacity for action, power-to, and power-over, which are linked to felicitous performative action within epistemic interpretative horizons” (Haugaard, 2018, p. 104). In other words, there are boundaries and set limitations of authority, which determine whether the use of power through authority is legitimate or not.
A reverse example can be seen in recent Elon Musk’s alleged manipulations of Bitcoin price, where his decisions on the acceptance of the cryptocurrency by Tesla make the price values volatile. Experts claim that “the volatility we have seen [in bitcoin] is an unexpected function of what I would call market manipulation by Elon Musk, and if that happened to a listed company he would be investigated and severely sanctioned by the SEC” (Ponciano, 2021, para. 7). Whether or not Elon Musk manipulated the market, it is evident that he has power over the entire cryptocurrency market despite not having the authority to do so. Therefore, authority can only work with the factor of power, but the latter is not dependent on the former.
Overlap
The overlap of provision of power and authorization of its use creates legitimacy. Authority and power become interchangeable or equivalent when the latter is exercised within the authorized boundaries. Such is the case of the majority of a decision made in organizations, where companies determine or develop strategies and framework of operations, which can be realized and implemented. These decisions are possible because the power can be exercised by the decision makers, such as management, within the set boundaries or limitations, which equates power with authority. In the context of decision making, the decisions need to be made with the element of power for them to have practical and real-world manifestation, and they also need to be within the authorized within the set boundaries for them to be legitimate. Thus, the overlap of these two conditions merges authority and power into a single notion, which is practical as well as devoid of negative repercussions, legal ramifications, and ethical negligence.
Discussion
Decision Making
The analysis revealed that power is critical for decisions to be acted upon, and authority relies on one’s power over others to be functional. Therefore, power is one’s ability to control and influence others in accordance with his or her will and interests. It is important to note that power also needs to be communicated for the subjects to be able to recognize it. In a sense, power is a framework under which different sets of incentives and motivators operate in conjunction to drive the subjects’ behaviors in the desired direction. For example, both positive and negative reinforcements can be utilized to affect a person’s behavior, and thus, imposing these influencing directives gives power to the person imposing these incentives.
The decision in the strategic management of the company arises in the process of fulfilling the goals of the organization. Thus, when the goal of the organization is fulfilled, there is a need to make one or another decision in the strategic management of the company. Therefore, as an assessment of how successful a decision is in the strategic management of a company, organizational goals can be the basis. Based on this, it is concluded that the management decision and the organization exist in interdependence. In the process of assessing the economic efficiency of the decision made in the strategic management of the company, there are methodological difficulties in determining the cost of the decision. As a rule, a decision in the strategic management of a company is presented in the form of information and is not expressed in material form but only creates conditions. The effect of a decision in the strategic management of the company can be positive or negative.
The first tool analyzes the market value of the solution in the strategic management of the company and the cost of the solution in the strategic management of the company. It involves a comparison of the solution options for the strategic management of the company for one object, subject to development and implementation in the same conditions. Instead of the market value of the solution itself, the strategic management of the company uses the market value of the manufactured products after the implementation of the solution in the strategic management of the company. Thus, when comparing two options, it is possible to determine the relative cost-effectiveness for one of the solutions.
The latter tool is based on assessing the effect of decision-making in the strategic management of the company, subject to the achievement of goals. As a rule, the standards for the use of a particular type of resource are used as assessment parameters. The solution can usually be presented in the form of a choice of an alternative. The surrounding reality rarely creates conditions that rigidly dictate the only permissible operations and methods of their implementation. In most cases, the opposite situation occurs in the form of the appearance of a large number of alternatives, from which one needs to choose the only alternative. At the same time, it is necessary to ensure the choice of such a management action and the methods of its implementation, leading to the effective achievement of the company’s goals. Every management decision is made by people, and therefore the decision-making process is psychological. The decision is inevitably influenced by the psychological state of the manager and his or her mood and feelings (MacIntyre, 2018). There is no doubt that in the process of making especially important decisions, people should exclude emotions and take actions based on rational considerations. In the process of assessing the performance of subordinates, managers should not transfer personal attitude to the assessment of each employee.
The main functions of the management solution are: implementation of daily tasks that ensure the efficient operation of the company; elimination of problems and discrepancies that arise when comparing the desired and actual state of factors of the internal and external environment of the enterprise; using the emerging prospects to increase the company’s competitiveness. It is necessary to distinguish between methods of making management decisions based on mathematical modeling and methods based on psychological techniques of working in groups. In the process of diagnosing a problem, its nature is determined, which subsequently helps to choose the appropriate options for solving it. A problem can be functional, structural, or parametric, where the nature of the problem is determined by the actions required to resolve it. As a rule, functional changes entail changes in the structure and values of parameters, therefore functional problems are considered the most complex and resource-intensive.
The essence of the systematic approach is to ensure the stability of the system, portfolio of management decisions. The formulation of restrictions and decision-making criteria is a notable condition for the correct formation of the list of alternative solutions and effective choices. The nature of the restrictions depends on situational factors and management characteristics. The most common restrictions include resource, personnel, financial, scientific and technical, market, legal and moral, and ethical. In addition to restrictions at this stage, the decision-maker determines the criteria, standards, with the help of which alternative solutions will be subsequently evaluated. Sometimes, for making a decision, it is necessary to develop a set of criteria, each of which will have a certain significance in choosing a decision.
Leadership
Regardless of the theories of leadership and the mechanisms of its formation, the problem of the formation and promotion of young leaders who will have legitimate and unconditional authority is of great importance for society as a whole in conditions of competition. Authority is one of the main forms of exercising power, with the help of which control over the actions of people and their coordination in the context of general and individual interests is ensured. Authority differs from influence in the indirect nature of influence on human activities, while the latter finds its expression in the form of directives and orders. What distinguishes authority from external coercion is the leader’s confidence in the legitimacy of the orders given to him or her and not in the awareness that rewarding or repressive actions may follow the execution or non-fulfillment of the order (MacIntyre, 2018). Authority provides for a certain degree of public order. The effectiveness of authority is largely determined by its interaction with other forms of exercising power, which at the same time does not exclude contradictions between them.
There is no doubt that leaders must undergo special training and selection to professionally engage in leadership activities and act within the framework of the norms and procedures for decision-making and the interaction of various fundamental principles of ethics. Thus, it can be noted that the issue of authority and leadership is very delicate. This is due to the dynamics and variety of theoretical and conceptual approaches to the study of this phenomenon, as well as a significant number of objective and subjective factors influencing it. In the course of the research, the author’s position on the interpretation of leadership was determined (MacIntyre, 2018). The analysis of the key concepts of modern literature concerning the transformation of an individual into a leader and the acquisition of authority by him with the help of social interests is carried out. In addition, today, the issue of training and nominating young leaders, who must have legitimate and unconditional authority, is gaining great importance.
Conclusion
In conclusion, power is one’s ability to control, influence, and direct others, which can be exercised regardless of whether such actions are authorized or not. Authority requires both the element of power and authorization of legitimacy of the latter’s exercise. With the exception of rare and extreme cases, authority inherently implies and grants power to an individual authorized by such as responsibilities and privileges. In the context of decision making, decisions can only be realized and have practical influence if there is power and authority to do so. The lack of the latter is bound to have legal and ethical precedents, which is the majority of decisions are made under these two conditions. In other words, decisions can only be effective if a person or group making these decisions has both power and authority, in which case, the terms overlap and become legitimate as well as equivalent.
References
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Joullie, J. E., Gould, A. M., Spillane, R., & Luc, S. (2021). The language of power and authority in leadership. The Leadership Quarterly, 32(4), 1-12.
Karakostas, A., & Zizzo, D. J. (2016). Compliance and the power of authority. Journal of Economic Behavior & Organization, 124, 67–80.
MacIntyre, A. (2018). The power of institutions: political architecture and governance. Cornell University Press.
Pardo, I., & Prato, G. B. (2016). Anthropology in the city methodology and theory. Routledge.
Ponciano, J. (2021). Musk denies Bitcoin ‘pump and dump’—and says Tesla will resume transactions once this mining goal is reached. Forbes.
Walsh, N. P. (2021). Former Afghan President Ashraf Ghani fled with only the clothes on his back, senior adviser says. CNN.