Empowering employees leads to innovation but challenges traditional control structures.
The article discusses how formal authority (the right to decide) and real authority (the actual control over decisions) are allocated in organizations. Real authority is influenced by the structure of information, which is determined by formal authority. Giving more real authority to employees can lead to more initiative but less control for the boss. Factors like workload, flexible rules, and performance measurement can increase employees' real authority. The amount of communication in an organization depends on how formal authority is distributed.