Question

Which one of the following statements explains the term 'decentralisation'?

• A. The tendency to withhold larger part of formal authority at higher echelons of management hierarchy
• B. When a larger part of the authority is delegated down the levels of management so that decisions are made as near the source of information and action is possible.
• C. The concern for the people employed in an organisation
• D. None of the above

Answer 1

The correct option is B When a larger part of the authority is delegated down the levels of management so that decisions are made as near the source of information and action is possible.

If the authority rests with senior management at the centre of a business it is called centralisation, or when it is delegated further down the hierarchy, away from the centre it is called decentralisation. Decentralisation is the process of redistributing or dispersing functions, powers,people or things away from a central location or authority.