Delegation and Decentralisation

Delegation of Authority
Delegation means conferring authority from one manager or organisational unit to another in order to accomplish particular assignments.

Features: 1. Delegation is authorisation to a manager to act in a certain manner. 2. Delegation has dual characteristics- subordinate receives authority, and superior retains original authority. 3. Authority once delegated can be enhanced, reduced or withdrawn depending on the situation and requirement. 4. Delegation of authority is always to the position created through the process of organising 5. A manager delegates authority out of the authority vesting in him. 6. Delegation of authority may be specific or general.

Steps in delegation

1. 2. 3. 4.

Determination of results expected Assignment of duties Authorisation for actions Creation of obligation

Principles of Delegation
1. 2. 3. 4. 5. 6. Principle of Functional Departmentation Principle of Unity of Command Principle of Delegation of Results Principle of authority level Principle of absoluteness of authority Principle of Parity of Authority and Responsibility

Advantages of delegation
1. 2. 3. 4. 5. 6. It relieves the manager of his heavy workload It leads to better decisions It speeds up decision-making It helps train subordinates and builds morale It serves as compensation to those employees who face the prospect of limited advancement It helps create a formal organisation structure

Barriers to delegation
On the managers side 1. Fear of loss of power 2. The I Can Do it Better Myself Fallacy 3. Lack of confidence in subordinates 4. Fear of being exposed 5. Difficulty in briefing 6. Inability to establish and exercise proper controls On the subordinates side 1. Fear of criticism 2. They lack adequate information and resources to help them discharge their duties properly. 3. Lack self-confidence and initiative 4. No positive personal gains to them for assuming extra responsibility

Centralisation and Decentralisation

Centralisation concentration of authority Decentralisation dispersion of authority

Definition: Allen Centralisation is the systematic and consistent reservation of authority at central points within an organisation. Decentralisation applies to the systematic delegation of authority in an organisation-wide context.

Delegation Vs Decentralisation

Centralisation
Advantages: 1. Effective utilisation of the talents of the top leader. 2. A unifying force that integrates all operations. 3. A strong coordinated top management team is developed. 4. Best arrangement to tackle emergencies. 5. Duplication of efforts and facilities is minimised. Disadvantages: 1. Delays in decision-making and communication. 2. Centralised power and authority may be abused. 3. Inhibit development of lower level people. 4. Low motivation and morale of lower level people. 5. Fortunes of the enterprise depend on the health and vitality of top executives.

Decentralisation
1. 2. 3. 4. 5. 6. 7. Advantages: Relief to Top executives Motivation of subordinates Quick decisions Growth and diversification Executive development Effective communication Efficient supervision and control 1. 2. 3. 4. 5. Disadvantages Expensive Difficulty in coordination Lack of uniformity Narrow product lines External constraints

Factors to be considered during Decentralisation

1. 2. 3. 4. 5. 6. 7. 8. Size of the organisation History and age of the organisation Philosophy of top management Abilities of lower-level managers Strategy and the organisations environment Nature of management function Available controls Costliness and significance of decisions.

Effective decentralisation

1. 2. 3. 4. 5.

Appropriate centralisation Development of managers Open communication Coordination Adequate controls