Delegation

Centralization &
Decentralization
By
Rokov Zhasa
NU/MN-22/11
17th October, 2011
Knowledge Objectives
• Delegation
• Centralization
• Decentralization
• Comparison
i. Delegation vs. Decentralization

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MGT 101 Management Process and Principles
DELEGATION
Part I
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MGT 101 Management Process and Principles
Delegation
• The process of giving authority to a subordinate in order to
perform the assigned activities by a superior is called
delegation of authority.
• Process of delegation involves:
I. Determining the results/outcomes from a position
II. Assigning tasks
III. Delegating authority for accomplishing tasks
IV. Holding the person responsible for accomplishment of task
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MGT 101 Management Process and Principles
Nature of Delegation
• It gives direction to a manager in performing his duties
• It has dual characteristics in the sense that though the
authority is delegated, it is still retained with the superior.
• It can be modified even after the action is over
• Manager cannot delegate authority which he does not
possess
• It may be specific or general and
• It is an art rather than a science 5
MGT 101 Management Process and Principles
PRINCIPLES OF DELEGATION
• Delegation of results expected
• Co-equal Authority and Responsibility
• Absoluteness of Responsibility
• Creation of accountability
• Unity of Command
• Limits of Authority
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MGT 101 Management Process and Principles
BENEFITS OF DELEGATION
• Relief to the Manager from routine work and concentration
on policy issues
• Basis for effective functioning
• Effective and Timely Decisions
• Empower and Develop Subordinates
• Satisfaction to subordinates
• Effective utilisation of organisational human resources
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MGT 101 Management Process and Principles
BARRIERS TO DELEGATION
• Fear of loss of power
• Avoidance of risk
• Lack of confidence in subordinates
• Autocratic style
• Fear of misuse of authority
• Over confidence of the superiors
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MGT 101 Management Process and Principles
THE ART OF DELEGATION
Guide for overcoming weak delegation
Define assignments & delegate in the light of
results expected
Select the person in light of job to be done
Maintain open lines of communication
Establish proper controls
Reward effective delegation
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MGT 101 Management Process and Principles
EFFECTIVE DELEGATION
• Establish clear-cut goals and define authority and responsibility
• Arrangements are made for guidance, coaching, supervision,
direction, communication and control.
• Set clear-cut assignment, delegate the details of coordination,
specific progress information needed, provide counselling,
guidance and adequate training followed up by appraisal of
current performance, counselling for improvement and coaching on
the job.

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MGT 101 Management Process and Principles
CENTRALISATION
Part II
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MGT 101 Management Process and Principles
CENTRALISATION
• Centralisation is the systematic and consistent
reservation or withholding of authority at control
points within the organisation.
• If authority is not delegated, it is centralised.

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MGT 101 Management Process and Principles
CENTRALIZATION
• Centralization is tendency to concentrate decision
making authority in organized structure
• Tendency to restrict delegation of decision
making:
Geographical
Departmental concentration of activities
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MGT 101 Management Process and Principles
ADVANTAGES
• Provides personal leadership
• Promotes integration and co-ordination
• Promotes uniform action
• To handle emergent situation:

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MGT 101 Management Process and Principles
DISADVANTAGES
• Delay in Communication
• Delay in Decision-making
• Fail to pay proper alternative on policy issues
• Under utilisation of Organisational Human
Resources
• Employee Dissatisfaction
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MGT 101 Management Process and Principles
DECENTRALIZATION
Part III
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MGT 101 Management Process and Principles
Decentralization
• Tendency to disperse decision
making authority in organized
structure
• Decentralization applies to the
systematic delegation of authority
in an organization wide context.
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MGT 101 Management Process and Principles
Decentralization
• Decentralization as a Philosophy & Policy: Decentralization
implies more than delegation:
• It requires
careful selection of which decisions to be pushed down &
which to be hold near the top
specific policy making to guide decision making
proper selection & training of people
adequate controls & feedback
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MGT 101 Management Process and Principles
DEGREE OF DECENTRALISATION
The degree of Decentralisation is determined by:
• Kind of authority to be delegated;
• the extent to which authority is to be delegated
downward in the organisation; and
• how consistently the authority is to be delegated

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MGT 101 Management Process and Principles
INDICATORS
• Hiring and fixing of employees,
• Approval of increases in pay (wage/ salary),
• Promotion of officers,
• Purchase and sale of capital equipment
• Approval of price quotations
• Acceptance of sales orders,
• Approval of travel expenses, etc. 20
MGT 101 Management Process and Principles
DETERMINING FACTORS
• Costliness of Decision
• Need for uniformity
• Size
• Firm’s history and Management Philosophy
• Capable Managers
• Control Techniques
• Dynamic conditions 21
MGT 101 Management Process and Principles
When to Decentralize?
• Relief to top executives
• Diversification
• Emphasis on Product and Market.
• Management Development
• Higher motivation

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MGT 101 Management Process and Principles
ADVANTAGES
• Effective communication
• Reduces Red-tapism
• Fast Decision-Making
• Enhances Employee Job satisfaction
• Executive Development
• Competitive advantage
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MGT 101 Management Process and Principles
Limitations of Decentralization
• Makes it difficult to have a uniform policy
• Increases complexity
• Results in some loss of control by top managers
• May be constrained by inadequate planning
• May be constrained by inadequate qualified managers
• Involves considerable EXPENSES

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MGT 101 Management Process and Principles
 Attention!!

Centralize or Decentralize?
This question that has challenged generations of managers

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MGT 101 Management Process and Principles
Balance
• Fine balance

• Preferably centralization for financing, budgeting, profit goals,

capital items, new products, major marketing strategies, personnel
policy etc.
In an organization there could be no absolute decentralization or
centralization
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MGT 101 Management Process and Principles
COMPARISON
Part IV
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MGT 101 Management Process and Principles
Delegation
• Delegation is a process
• Delegation is between one superior and
one subordinate
• Delegation is a must for management
and it creates and organisation
• The superior or delegator exercises
supervision and control over the
delegate
Delegation vs. Decentralization
MGT 101 Management Process and Principles
Decentralization
• Decentralisation is the end-result of
planned delegation
• Decentralisation is a company wide
delegation as between top management and
divisions and/ or departments
• Decentralisation is optional and appears on
the scene when the organisation grows and
is large and complex.
• In decentralisation top management
exercises broad and minimum control
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Decentralisation :
• When an organisation is large and complex and when competent managers are available, higher
decentralisation is always preferable.
• In a divisionised structure we have greater decentralisation.
• Similarly with a fast and effective communication systems e.g., computerised management information
system
• When quick, responsive, adaptive creative action is necessary we should have flat (decentralised)
structure
Centralisation:
• When repetition and standardisation of operations can be introduced in the work place. Centralised
control is feasible.
• When we have narrow span of control and numerous levels in management hierarchy, organisations are
tall and centralised.
• When we have wide span of control and few levels of management, organisations are flat and
decentralised.

Conclusion 29
MGT 101 Management Process and Principles
References
• Sherlekar, SA, Sherleker, VS, Principles of Business Management, Himalayan
Publishing House, Reprint 2009, pg 257-265
• Rao, P. Subba , Management and Organisational Behaviour (Text, Cases and
Games), Himalayan Publishing House, pg 137-149
• Mullins, Laurie J., Management and Organizational Behaviour, Second Editon, pg
121, 125, 275-285
• http://en.wikipedia.org/wiki/Decentralization, Monday 03 October 2011 04:06 PM
• http://en.wikipedia.org/wiki/Delegation, Monday 03 October 2011 04:07 PM
• http://www.expertmanage.com/index.php?option=com_content&view=article&id=11
2&Itemid=75, Saturday 08 October 2011 10:05 AM
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MGT 101 Management Process and Principles
 THANK YOU
And I am open to queries……

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MGT 101 Management Process and Principles