Approval chain

Short description: An approval chain is a structured process that allows requests, proposals, or projects to be reviewed and validated by designated individuals with the authority to approve. It establishes a clear hierarchy, ensuring that approvals occur in a specific order, facilitating systematic decision-making.

Learn more: Approval chain refers to the workflow where decisions are evaluated by a hierarchical series of individuals within a company. This process involves multiple levels. Each level has the authority to approve or reject a request before it advances to the next.

Approval chains can differ significantly based on the organization’s size, structure, and the nature of the request. They are commonly used for significant decisions requiring input or consent from various organizational levels, such as budget approvals, hiring decisions.

Here’s a simple example of an approval chain in a corporate setting for a budget request:

An employee requests additional budget allocation for a project.

1. Employee Submits Request.

2. First Level of Approval:The project manager submits the request to their direct supervisor for initial review. The supervisor evaluates the justification and either approves or denies the request.

3. Second Level of Approval: If the supervisor approves the request, it is forwarded to the department head for the next level of review.The department head reviews the budget request and either approves or denies it.

4. Third Level of Approval:If the department head approves the request, it is sent to the finance department for budget impact assessment and final approval.The finance team either approves or denies the request.

5.Final Approval:If the finance department approves it, the executive board reviews it in the context of overall company strategy and makes a final decision.

Properly implemented, such an approval chain minimizes risks and enhances decision-making efficiency. An effective approval chain process helps minimize errors and miscommunications, as well as ensuring compliance with internal policies and external regulations.