Shepherding Situational Authority: Dealing with the Paradox of Radical Delegation in Hierarchies

Abstract

Managers who wish to empower and delegate authority counter a governance paradox: how to foster proactive judgment and collaboration of employees but maintain adequate control and alignment? Prior literature primarily suggests dealing with the paradox by clearly formalizing the scope of delegated authority to shield employee motivation from managerial interferences and managers for overindulgences of employee discretion. However, the more radical delegation is attempted involving also organizational matters, the more unavoidable the overlap of formal and delegated authority becomes. Utilizing internal discussion forum logs and interviews, I explored the organizational dynamics of formal and delegated authority in three mid-sized software services companies that had principally abandoned traditional manager-subordinate structures for broad employee autonomy but where a handful of top managers remained. I discovered that the studied organizations presented a contrast to scholarship: Employees enjoyed from an a priori undelineated encouragement to drive their own and company matters. Instead of a formalized system, decentralized authority was balanced by cross-mediation of managerial interventions, and, respectively, social scrutiny of managerial involvement. These social practices centered around, what I denote as, an attempt to shepherd situational authority so that what makes sense for the whole and who decides would get to be evaluated situationally rather than based on fixed authority. My findings contribute by extending the current understanding of the radical delegation of authority in companies with formal authority asymmetries.