Authorization occurs when a person with a certain level of authority gives permission for an action to take place. Authorization is a key component of the control systems used within an organization. The following are examples of authorization:
- A payables manager authorizes the expenditure of funds.
- A human resources manager authorizes the hiring of an employee.
- A materials manager authorizes the issuance of materials to the shop floor.
Authorization may be given verbally, via a signature, by the use of a key or key card, and so forth.
Authorization is derived from the power vested in individuals by an organization. Typically, a person is only allowed to issue authorizations if he is also responsible for the outcome of the event. Thus, authority and responsibility are combined in the same person.