Decentralization

 Means dispersal of authority and the power of decision-making to lower leels of

the organization.
 It should be distinguished from physical dispersion activities.

Dispersion
 Is the process of building plants and offices with physical distance between them.
 This may or may not facilitate decentralization of authority.

The degree of decentralization can be judged from the following factors:

 Kind of authority delegated
 Levels to which it is delegated
 Consistency of practice

Advantages of Decentralization
 Reduction of Burden on Top Executive
 Diversification of Activities
 Development of Managerial Personnel
 Promotion of Motivation
 Better Coordination of Activities
 Effective Control
 Internal and External Economies

Limitations of Decentralization
 Decentralizing the management and activities into a number of divisions can be
achieved after a good amount of initial expenditure only.
 Under the decentralized set-up, there may not be uniform systems and routines.
 To achieve all the advantages of decentralization, the product line or lines of the
concern should be broad enough.
 The wide dispersal of authority of decision-making under a decentralized set-up
creates a problem of coordination.
 Decentralization may not be practiced efficiently if sufficient number of competent
personnel is not available.

Difference between Delegation and Decentralization

Nature:
Delegation of authority
 Is a process which results in decentralization
 It is the cause
Decentralization
 Is the effect

Responsibility:
Delegation of authority
 The delegator does not absolve himself of the responsibility.
 He shares it with his delegate.
Decentralization
 The delegate head of unit becomes directly liable for his actions.

Need:
Delegation of authority
 Is a must in any enterprise on account of delegator’s limitation to do all things by
himself.
Decentralization
 Is a deliberate policy of the top management, which may or may not be practiced.

Control:
Delegation of authority
 The final control over the activities of organization lies with the delegator of
authority.
Decentralization
 This control is exercised by the delegate or say by the head of the unit.
Importance of Delegation of Authority
Delegation
 Lightens the burden of key executives in tackling routine matters and enables
them to concentrate on vital aspects of management.
 Is important for better management.
 It is the key to a manager’s job.

The Importance of Delegation

 Delegation relieves the manager of the need to attend to munor or routine types
of duties.
 Delegation of authority enables quick decisions to be taken at all levels within the
general policy framework.
 Delegation of authority stimulates the subordinate to perform the duties assigned
to him.
 The process of delegation helps in maintaining healthy relationship.
 The expansion and diversification of an enterprise needs the services of more
and more persons.

Meaning of Delegation
 It means devolution of authority on subordinates with a view to making them
perform the assigned tasks or duties.
 It is the ability to get results through others.
 It enables the managers to distribute their load of work to others leaving them
free to concentrate on higher functions of management.
 It is the assignment of responsibility and authority to the subordinate.

Elements of Delegation
 Assignment of duties or responsibilities by an executive to his immediate
subordinate.
 Granting of authority to make use of resources and take necessary action.
 Creation of obligation for accountability on the part of subordinate to the
executive for satisfactory performance.
Inseparable features of the process of delegation

 Responsibility
 It means the work or duty which the subordinate is expected to perform by
virtue of his position in the organization.

 Authority
 It means powers and rights entrusted to make possible the performance of
work delegated.

 Accountability
 It is an obligation to account for and report upon the discharge of
responsibility or use of authority

Basic Principles of Delegation

 Duty should be assigned in Terms of Results or Objectives.

 Authority should be Coexistence with responsibility.
 Accountability cannot be Delegated.
 Accountability should be Unitary.

Difficulties in Delegation
Main difficulties
 I can do it better
 Desire to dominate
 Lack of ability to direct
 Lack of confidence in subordinate
 Conservative Attitude of the boss or cautious temperament
 No appreciation of Problems of the department.
On the part of the Subordinate
 Lack of Self-Confidence
 Fear of Criticism
 Absence of Positive Incentives
 Non availability of Information or Resources to Perform the Assigned duty.

To avoid jeopardise his leadership and bring disorganization and conflicts the
manager should analyse his job and determine:
 Tasks which cannot be delegated (job of planning, controlling, policy making and
coordination)
 Tasks which can be delegated to others (the job of administration of policies)>
 Tasks which are of routine nature and must be delegated.

Certain tasks
- There are certain tasks which can be delegated but with care.
- It cannot be delegated, no manager can effectively delegate responsibility and
authority for initiating and making final decisions for planning, organizing,
motivating and controlling.