Decentralisation

Definition of Decentralization

The transfer of authorities, functions, rights, duties, powers and accountability of the top level management to the middle or low-level management is known as Decentralization. It is nothing but the delegation of authority, in the entire organization or it can be said that decentralization is an improvement over delegation. When there is decentralization, the considerable authority, responsibility and accountability are vested to the lower levels in the organisational hierarchy.
Many organizations take decisions regarding the diffusion of authority from a higher level to other levels of management like departments, divisions, units, centres, etc. This dissemination of authority is known as delegation, but when it is exercised in the whole entity, on a large scale, it is decentralization. So here it must be noted that the extent to which the right, duties and powers are disseminated is important.
This is the greatest advantage of decentralization that the top management gets unburden, and timely decisions can now be taken on different matters. Moreover, it will lead to better supervision and motivation of the employees.

Key Differences Between Delegation and Decentralization

The following are the major differences between delegation and decentralization:
  1. When an authority or responsibility is entrusted to the subordinate by a superior is known as Delegation. Decentralization refers to the final result which is attained when the authority is delegated to the lowest level, in an organized and consistent manner.
  2. Delegation is the reason for Decentralization.
  3. In delegation, only authority and responsibility are transferred but not the accountability. However, in decentralization, all the three are transferred.
  4. In delegation, there is less liberty of work to the subordinates whereas, in the decentralization, a substantial amount of liberty can be seen.
  5. In delegation, the parties involved are superior and subordinate. On the other hand, in decentralization, top level management, and other management levels are involved.
  6. A delegation of authority is a must for every organisation, as no person can alone do each and every task. Conversely, Decentralization is discretionary.

Comparison Chart

BASIS FOR COMPARISONDELEGATIONDECENTRALIZATION
MeaningDelegation means handing over an authority from one person of high level to the person of low level.Decentralization is the final outcome achieved, when the delegation of authority is performed systematically and repeatedly to the lowest level.
What it is?CauseEffect
AccountabilitySuperiors are accountable for the acts done by subordinates.Department heads are accountable for the acts of the concerned department.
PartiesSuperior and SubordinateTop Management and Middle or Low Level Management.
RequirementYes, for all organization delegation of authority is very necessary.No, it is an optional policy which may or may not be adopted by the organization.
Liberty of WorkSubordinates do not have full liberty.A substantial amount of freedom is there.
ControlThe ultimate control is the hands of superior.The head of the department or division have the control.


Conclusion

Delegation and Decentralization both have its merits and demerits. They are not similar terms, but the decentralization is the result of the delegation of authority. So there is no competition between them as they both complete each other.
They are helpful to the success and progress of the organisation, but there is a precondition for the delegation that there should be a desire of the manager to give freedom of work to the persons whom work is assigned. Let them choose the methods and solutions for their problems, in order to guide them and let them learn from their mistakes. In this way, they will get the training and development.
Another prerequisite is that the juniors should communicate with the seniors freely. However, this is a demerit of decentralization, which due to no control of top level management over the middle or low-level management, the absence of coordination and leadership is felt.

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