Question

Short Answer Question:
Explain through a suitable example, how a delegated authority can be extended to decentralization of authority.

Answer 1

Decentralization is extending delegation to the lowest level. Decentralization explains the manner, in which decision-making responsibilities are divided among hierarchical levels. Decentralization refers to delegation of authority throughout all the levels of the organisation.

Decision-making authority is shared with lower levels and is consequently placed nearest to the point of action. In other words, decision-making authority is pushed down the chain of command. Delegation is the process and decentralization is the end result, e.g. if the director gives the responsibility to production head to complete the target of 20000 units and authorizes him to hire the workers, production head further shares his responsibility with manager to select the workers.

Manager shares his responsibility with supervisors, who are dealing with workers, authorizes them to select workers. Here, the responsibility is distributed at every level. That’s why, we say systematic delegation leads to decentralization.