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ACCA Applied Knowledge · Business and Technology · Business organisational structure

Danvers Co introduces a new reporting structure, but staff continue to rely on a respected long-serving clerk, who holds no managerial title, for decisions and advice, and they often ignore the newly appointed supervisor. Which statement best explains the situation?

The clerk has informal power, such as expert or referent power, based on experience and respect rather than formal position. The supervisor still holds formal authority, but the informal organisation is undermining its effectiveness. Both formal and informal organisations coexist in the business.

  1. AThe clerk holds formal authority delegated through the scalar chain
  2. BThe clerk has informal power, such as referent or expert power, which is not based on position in the formal structureCorrect
  3. CThe supervisor's authority has been removed by the informal organisation in law
  4. DThe clerk's influence shows that the formal organisation no longer exists

Explanation

The clerk's influence stems from personal qualities, experience and respect (expert or referent power), not from a formal position. The supervisor still holds formal authority in law and structure, although it is less effective in practice. The formal organisation continues to exist alongside the informal one.

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