Key Concepts
Formal leadership has four key concepts. Let's explore each of these concepts in detail:
Formal leaders are appointed: Formal power is based upon a person's position in the organization. Formal leadership is very useful in establishing the legitimacy of a member's authority in the organization because it is expressly sanctioned by the organization. For example, few, if any, employees of a corporation question the president's authority because he was duly appointed to the position by the corporation's board of directors. On the other hand, there may be other types of leaders in an organization whose power and authority are not based upon the formal sanction of the organization. For example, if you are appointed by your team members to be the team leader, you don't have formal leadership because your authority is not sanctioned by the organization.
Rules, procedures, and customs define power and limit behavior: So what does this mean. Well, a formal leader's scope of power is defined by the organization's formal rules, procedures, and institutionalized customs. Their behavior is also constrained by these rules, procedures, and customs. For example, the president of a company may be the most powerful employee of an organization, but he is still bound and constrained by the company's anti-discrimination policy.
Formal leadership is necessary to interact with outsiders: Individuals and other organizations will not usually enter into certain relationships with an organization unless a formal leader approves of the transaction. For example, the organization must delegate authority to an individual to enter into contracts, obtain bank financing, and bring lawsuits to protect the organization's interests.
Formal leadership is limited: Organizational members may follow the orders of a formal leader, but they may not be that motivated or loyal to a formal leader merely because of her formal authority. A wise leader will supplement her formal authority with other forms of power, such as reward power, referent power, and even judicious use of coercive power.
Lesson Summary
Formal leadership is authority conferred upon a member of an organization based upon the position the member holds in the organization. Formal authority is typically based upon the formal rules and procedures of the organization and may be supplemented by institutionalized organizational customs. Formal leadership is often essential for an organization to interact with others from the organization's environment. Finally, it's a good idea for a leader with formal leadership to supplement his base of authority with other forms of authority.
