In a small- to mid-size company trying to implement scrum, it may very well happen that the hierarchical superior of the Team members becomes the Scrum Master (short of being able to fund a full-time Scrum Master position). For example, it could be the CTO in a software start-up company with, say, seven employed developers.
By implementing scrum, the CTO would of course agree to "lose" the authority on the team organisation, task allocation, etc. as it should be. Rather, my question is whether or not the "natural" authority that the Scrum Master has over the Team members (e.g. due to him being CTO) would be an impediment for the process. What are the issues with such a situation? Is it common? Are there any measures that can be used to alleviate the disadvantages?