The main difference between the real executive and the nominal executive is the decision-making power. A nominal executive is the head of an executive team but doesn’t have any decision-making power. On the other hand, a real executive is responsible for all the actions because he makes all the decisions.
Key Takeaways
- The nominal executive has no decision-making power
- A nominal executive can’t be held responsible for the decisions
- The real executive makes all the decisions of an organization
- The real executive is responsible for all the decisions made by him
- The nominal executive is the ceremonial and dignified part of the executive branch while the real executive is the powerful part of the executive branch
What is an Executive?
An executive is a very important person in a company who has full authority over the employees and resources. Usually, an executive is a senior-level officer who forms and implements various business policies and operational activities for the organization or company. An executive title is also known as a C-level title and it is the most important and influential title that anyone can hold within an organizational setup. Depending on the roles, an organization can have various types of executives, for example –
- Chief executive officer
- Executive director
- Executive officer
- Business executive
- Project Executive
- Account executive, etc.
- Chief information executive officer
- Chief marketing executive officer
- Chief operating executive officer
- Chief financial executive officer
On the other hand, based on the decision-making power an executive can be divided into two types; they are –
- Nominal Executive
- Real Executive
What is Nominal Executive?
The nominal executive is a type of executive in an organization who is the head of the executive section and handles all the executive tasks. Though the nominal executive is the highest-powered executive he doesn’t have any decision-making powers. He can’t take any decision that will increase the growth of a business. So, a nominal executive won’t be responsible for any kind of decisions that have been made by fellow executives. So, most of the duties of a nominal executive are “ceremonial and dignified” with a limitation like a duty. A prime example of the nominal executive is the Chairman of a company. Usually, the Chairman is the most powered person in the company but he doesn’t have the decision-making power. The CEO or the COO makes all the decisions regarding the business operation. So, the Chairman doesn’t involve directly in governing the company. The chairman only performs ceremonial functions and his powers are limited to the policy-making of the company.
What is Real Executive?
A real executive is a person in the company who works under the nominal executive but unlike the nominal executive, he has the decision-making power. A real executive uses all his executive powers and makes all the required decisions so that the business operates within the organizational policies. All the relative and important decisions of a business are taken by the real executive. The real executive remains responsible for all the decisions that he has made. Basically, a real executive remains responsible for the activities that have been performed by the nominal executive. A common example of a real executive is CEO or COO. A CEO or COO takes all the decisions of an organization and remains responsible for the growth of a company. So, all the powers of a company are vested in the “real executive.”
Difference between the Nominal Executive and Real Executive
| Nominal Executive | Real Executive |
| A nominal executive is the head of the executive branch | A real executive works under the nominal executive |
| A nominal executive doesn’t have any decision-making power | A real executive has all the decision-making power |
| Generally, the nominal executive doesn’t responsible for any kind of decisions that are made by the real executive | A real executive is responsible for all the decisions that are made for the growth of the business |
| Usually, the nominal executive forms the policies of an organization | The real executive makes all the decisions to ensure the business is operating according to the company policy |
| The nominal executive is the ceremonial and dignified part of the executive branch | The real executive is the powerful part of the executive branch |
| The Chairman of a company is an example of a Nominal Executive | The CEO of a company is an example of a Real Executive |
References:
https://www.iilsindia.com/study-material/943231_1592462565.pdf
Last Updated on December 25, 2023 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.
