Authority means the right to command, to take decision and to guide the action of others. Different managerial level executive must be given authorities to discharge their function efficiently. The person who is given the power to command is called supervisor and the persons on whom such power is exercised is called subordinates. These are three types of origin of authorities. There are formal authority, acceptance authority and competence authority.
When an executive enjoys some authority by virtue of his position in the organisation, it is called formal authority. The examples of formal authority are deriving of authority by the general manager from the board of directors. When the subordinates accept the authority of the supervisor, it is called acceptance authority. When authority emerges because of one’s competence in certain field, it is called competence authority.