The conceptual difference between authority and power is very important when it comes to understanding the different powers, not only at the business level, but also at the level of public institutions.
The relevance of an authority is determined by the power it has, through the powers that the office gives to manage and make decisions around a group, an institution, a territory or the unit that is in charge.
The authority of the president of a country, is usually delivered through an administrative act of the executive branch, which confers as power to direct the implementation of public policies in some areas of a country; economic, social, health, justice, housing, etc.
Likewise, the power is distributed in all the institutions, so that the authorities, on occasion, must take measures in a coordinated way, because each one has some attribution that intervenes in a decision.
When should a decision be made in a coordinated manner by different attributions involved?
In a public institution, such as a country, in matters of justice it is important that the Minister of Justice (representing the president), the police, meet for executing security action measures, and the judiciary, represented by judges, who provide information regarding the existing penalties for the different crimes. And so develop an action plan that guarantees the security of citizenship.
And in a company?
The general management constantly has to meet with the authorities of its sub-management; Commercial, finance, operations, human resources, and other manager.
To implement any global strategy, such as improving the position of the company in the market .
The commercial manager, through his power, will design a marketing and sales strategy to improve attract new customers and retain existing ones. But his power will not be able to instruct operations personnel, as he does not have the powers to do so.
The human resources manager will develop an incentive plan for meeting goals for all staff members, but only in that area. I could not make commercial decisions, or investment in assets.
The finance manager will propose what to invest company resources to leverage better results. These investments can be in assets , human resources or marketing . However, its mission is to efficiently use the resources of the organization, not to give guidelines to the employees of other units, because for that there are area managers.
In summary, power is the attributions of a position materialized in the authority figure.
People who achieve excellent results with power, exercise authority in a positive way, adding business leadership skills in their management.