Principles & Practice of Management

TOPIC:

Decentralization vs. Delegation

Name: Priya Mohan Samant

Course: MBA ACE (A)
ERP ID: 0221MBA051
 What is Decentralization?
Decentralization refers to a particular form of organizational
structure in which top management delegates decision-making
responsibilities and day-to-day operations to middle- and lower-level
employees. This allows management to focus more time on important
decisions. Businesses often feel the need to decentralize to keep their
operations efficient.
Decentralization of administration can be understood as an orderly
delegation of authority across all levels of administration within an
organization. This explains how decision-making authority is
distributed across different levels of the organizational hierarchy. In
other words, it refers to decentralizing powers, functions, and
responsibilities away from a central authority.
 Benefits of decentralization

1. Rapid decision making:

By shifting decision-making authority to the operational level closest
to the situation, decisions are made faster and better.
‍
2. Management Development:
Promotes independence and self-confidence in subordinates as they
must rely on their judgment when delegating authority to lower
levels. Such delegation constantly challenges managers to find
solutions to problems they face in their daily work.
‍
3. Development of management skills:
A decentralized structure gives subordinates opportunities to
demonstrate their skills. The promotion also provides management
with a pool of talented workers who can be placed in challenging and
responsible situations.
‍
4. Top Management Remedies:
The scope of direct supervision of subordinates by managers is
reduced as subordinates are given the freedom to make decisions and
act accordingly within limits set by managers. As a result,
management is given more time to make policy decisions.
‍
5. Promote growth.
Lower-level managers can perform their functions in ways that best
suit their departments and regions, allowing for more independent
management. A sense of competition between different departments
spreads, allowing you to outperform others. This ultimately leads to
increased productivity and more profit for the company.
‍
6. Control improvements:
Each level's performance is measurable and each department is
individually responsible for its results. It determines how well the
organization's goals are met and the contribution of each department.
‍
7. Effective Communication:
An organization's communication system becomes more effective
through decentralization. It also builds strong relationships between
superiors and subordinates. Decentralization reduces the burden on
top-level managers and gives some middle and lower-level managers
real work experience and boosts morale.
 What is Delegation?
To become a highly effective and truly successful project management
leader, you must understand what delegation is and focus on the
areas that make the most difference to project success.
These areas include risk and problem management, project planning,
high-level stakeholder management, ensuring final product quality,
and team leadership and motivation. Delegating low-level
administrative tasks and detailed planning are important if you want
to use your time effectively.
Proper delegation motivates and empowers those to whom you
delegate...
Delegating not only helps you focus on what matters, but also helps
you grow and help others. It also helps you grow. Proper delegation
motivates, motivates, and contributes to the professional development
needs, confidence, and competence of the person to whom you are
delegating authority.
 Importance of Delegation
Effective management
Delegation gives managers a break by sharing the workload. This
allows administrators to focus on high-priority tasks. In addition, being
freed from mundane tasks allows us to explore new ideas.

Employee Development
Assign new tasks to employees with the help of delegation. This allows
you to work in a different field than the monotonous and monotonous
job, helping you develop new skills and discover hidden talents. The
delegation, therefore, leads to employee development y allowing them
to expand their workspace and helping them grow. Effectively, it
enhances their future prospects and develops future managers.

Employee Motivation
Through the delegation process, supervisors delegate assigned tasks to
appropriate subordinates. Not only does this lead to the flowering of
talent, but it also has various psychological benefits. This is because
faith and trust in subordinates increase their self-confidence and self-
esteem, which ultimately drives them to work harder.

Growth promotion
As mentioned earlier, delegation provides employees with
opportunities for advancement and effectively trains them to be better
decision-makers and managers. This further supports the
organization's expansion process as it already has a suitable and
qualified workforce.

Management Hierarchy
 Delegation establishes a master-detail relationship. Also, it is directly
related to the scope and flow of authority. For authorities to decide
who must report to whom.

Decentralization vs. Delegation

Basis Decentralization Delegation

Decentralization is an A delegation is a
Nature
optional policy. compulsory act.

There is greater Less freedom to

Freedom
freedom of action as make decisions for
of Action
there is less control yourself as more
over executives. control from your
boss.
It is the result of the It is a process
Status
policy decision of the followed by
top management. sharing tasks.
It has wide scope as it It has wide scope
Scope
involves all levels of as it involves the
management. superior and his
immediate
subordinate only.
The main purpose, in The main purpose
Purpose
this case, is to increase is to lessen the
the role of the burden on the
subordinates in the manager.
organization by giving
 them the authority to
take decisions.

Example of Decentralization
Johnson and Johnson
Johnson and Johnson may be known for its consumer business of
baby oil and bandages, but many people don’t know they’re also a
medical device and diagnostics business, as well as a
pharmaceutical company. 

With more than 130,000 employees worldwide, Johnson and

Johnson have long been known as a decentralized company.

Johnson and Johnson have chosen local management to run its

companies for a few reasons: 

 They understand the consumer better

 They understand the people they are directly working with
 They understand the government and marketplace needs
 If they make mistakes, it won’t cripple the whole organization

Johnson and Johnson know it would be difficult for management in

the US to run international locations since they simply don’t know
enough about them.

Former CEO William Weldon said that while relinquishing control

isn’t always easy for the company, they trust their managers to run
the businesses.
 Example of Delegation
Investor relations and employee performance reviews are critical
functions of any business that should be handled by the owners,
managers, or executives. On the other hand, day-to-day activities like
running operational tasks or organizing events should be delegated to
middle management and team leaders.

Some examples of delegation in the workplace with varying levels of

trust and autonomy include:
 Giving directions to a subordinate and telling them exactly
what to do
 Assigning someone to compile research, gather feedback,
and report back to you so you can make informed decisions
 Delegating decision-making responsibility to someone else,
but retaining authority for the final say
 Delegating both responsibility and authority to proceed,
except in the event of an unexpected turnout or emergency
 Delegating completely, putting team leaders in charge of
tasks and decisions, and allowing them to complete them as
they see fit

References
.”https://www.betterup.com/blog/decentralization-in-management
https://www.wrike.com/blog/delegating-work-difficult/#Examples-of-delegation-in-the-workplace