HKSM

The formal power to assign and direct project resources, commit funds, make decisions, and issue approvals.

Key Points

• Formally granted by the organization or sponsor, often documented in the project charter or agreements.
• Defines what the project manager can approve, including spending limits, resource assignments, and certain scope or schedule changes.
• Scope of authority varies by organizational structure; it is narrower in functional/matrix settings and broader in projectized environments.
• Authority can be delegated with clear limits, while overall accountability remains with the delegator.

Example

A project manager is authorized to approve up to $25,000 in contingency spending and reassign team members across work packages without seeking sponsor approval. When a testing bottleneck occurs, the PM buys additional test equipment and temporarily moves two engineers to testing to keep the schedule on track.

PMP Example Question

Which action best demonstrates a project manager's authority?

1. Coaching a team member to improve performance
2. Negotiating a discount with a supplier
3. Approving use of contingency funds to purchase extra test equipment
4. Facilitating a lessons learned workshop

Correct Answer: C — Approving use of contingency funds

Explanation: Authority is the formal power to commit resources and spending, make decisions, and issue approvals. Option C reflects that formal decision-making power.