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.

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 order
concerning the production,sales or finance related behaviour of subordinates.

STAFF AUTHORITY. authority to advise, but not to direct, other managers. For example, a
personnel department has staff authority to advise functional managers in an organization.

The nature of line, staff and functional authority relationships is

discussed below:
The terms line and staff are used quite often in management literature. These
terms have been borrowed from the military terminology. Organisationally, the
line is the chain of command that extends from the Board of Directors through
the various delegations and re- delegations of authority and responsibility to
the point where the primary activities of the company are performed.

Line departments are those that are directly engaged in producing or selling
the goods or services. All other activities are staff activities. Staff refers to
those elements of the organisation which provide advice or service to the line.
When one position exists primarily to provide advice or service to another, it is
a staff position.

According to Allen, “line refers to those positions and elements of the

organisation, which have the responsibility and authority and are accountable
for accomplishment of primary objectives. Staff refers to those elements which
have responsibility and authority for providing advice and service to line in
attainment of objectives.
“Line elements provide decision authority and a central means for the flow of
communication through a scalar & chain of authority; staff elements facilitate
the .decision process by bringing in expert and specialised knowledge. For
example, the production manager in a factory is a line manager since he is
directly responsible for achieving the production targets of the organisation.

Similarly, the marketing manager is also a line manager since he is engaged

in selling products of the company. But, an industrial engineer is a staff man.
He is not directly entrusted with the task of production. He is required to give
specific advice to the production manager. His job is to review the various
production methods, incentive plans, quality control techniques, etc. Similarly,
a market research manager is a staff manager.

His job is to assist the marketing manager by gathering a wide variety of

information about the market in which the company operates. The internal
auditor is also a staff manager since he is predominantly concerned with
assisting the top management in exercising control over the various activities
of the concern.

Line managers make the strategic decisions by exercising command

authority, whereas staff official’s advice and counsel with no authority to
command except within their own staff chain of command. The use of staff to
assist line came into being because of the need to provide special counsel
and assistance to the manager who was unable to carry out the demands of
his position.

Fayol described staff official as “an adjunct reinforcement and sort of

extension of the manager’s personality”. Line officials are in the chain of
command from the highest executive to the lowest position in the
organisation. Each successive manager exercises direct line authority over his
subordinates.

Although the line-staff concept is firmly entrenched in the management theory,

the distinction between these two concepts is not very clear in many
instances. There are many functions which are line in one company and staff
in another.

Designing, and engineering departments in an aircraft manufacturing

company is a line function whereas the same department would be a staff
function in a drug manufacturing company. Similarly, in a hire purchase
company, finance is set up as a line function whereas in a typically
manufacturing company, finance operates as a specialised staff department.
Research in a drug manufacturing company, may be a line function whereas it
may be a staff function in many others.