The Authority Matrix is a fundamental arrangement where in the decision making process is divided into different levels in order to empower a specialized task.
The matrix includes various areas such as accountability, responsibility, recommendation, consultation and information sharing.
The person who delivers the job is directly associated to the role of being accountable. It is the responsibility of the person to manage the person who delivers the job i.e. the reporting manager. It is also the person’s (i.e. the manager, in this case) responsibility to review and give recommendations if required to help improve the quality of the task.
And finally, information sharing about a task processed is essential for the employees who might be associated to the process and would be required to respond. For e.g. within a technical firm, it is the engineer who is accountable for developing the product.
The Project Manager associated with the project will be held responsible for the project completion. Consultation with regards to the project will be required from the subject matter experts and finally, on job completion, the senior management will be informed about the job completion.
The Authority Matrix should be designed in such a way where it’s the CEO that leads the organization structure who will be responsible for the core decision making process.
The following level of authority should consists of directors that lead operations, whose responsibility will be to take the operations decisions. This will remain an internal activity. Any approvals related to operations including purchasing or hiring should be made by them.
Also, this level of authority can be held as signatories to bills, appointment letters and other internal circulars. The next level of authority should include the senior management team and general managers. Their role would require them to provide consultation and recommendations to the directors. And finally, the next level of authority should comprise of team-level leadership i.e. team managers.
Although the team managers are responsible for taking decisions on a daily basis like work allocation, leave approval etc. However, in case of any decisions relating to resignation or any attrition, the decision making authority will escalate to the next level of senior managers along with recommendations from the managers.
The importance of an Authority Matrix within an organization can be described from two different perspectives:
1. Employee’s perspective:
Authority Matrix provides guidance to all employees by laying out the official reporting relationships that govern the workflow of the company. Without a formal matrix structure, employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what.
Authority Matrix also improves operational efficiency by providing clarity to employees at all levels of a company. By paying mind to a clear structure, departments can work more like well-oiled machines, focusing time and energy on productive tasks.
A thoroughly outlined structure can also provide a roadmap for internal promotions, allowing companies to create solid employee advancement tracks for entry-level workers.
2. Investor’s perspective:
A formal outline of a company’s structure makes it easier to add new positions in the company, as well, providing a flexible and ready means for growth. A strong authority matrix improves efficiency and in turn promises a steady growth hence, attracting potential investors.