In an organization, it is not possible for one to solely perform all the tasks and take all the decisions. Due to this, delegation and decentralisation of authority came into existence. Delegation means the passing of authority by one person who is at a superior position to someone else who is subordinate to him. It is the downward assignment of authority, whereby the manager allocates work among subordinates.
On the other hand, Decentralization refers to the dispersal of powers by the top level management to the other level management. It is the systematic transfer of powers and responsibility, throughout the corporate ladder. It elucidates how the power to take decisions is distributed in the organizational hierarchy.
These two terms are often used interchangeably, but they are not alike. So, here we have compiled a detailed difference between delegation and decentralization of authority.
Content: Delegation Vs Decentralization
|Basis for Comparison||Delegation||Decentralization|
|Meaning||Delegation means handing over an authority from one person of high level to the person of low level.||Decentralization is the final outcome achieved, when the delegation of authority is performed systematically and repeatedly to the lowest level.|
|What it is?||Technique of management||Philosophy of management.|
|Accountability||Superiors are accountable for the acts done by subordinates.||Department heads are accountable for the acts of the concerned department.|
|Requirement||Yes, for all organization delegation of authority is very necessary.||No, it is an optional philosophy which may or may not be adopted by the organization.|
|Liberty of Work||Subordinates do not have full liberty.||A substantial amount of freedom is there.|
|Control||The ultimate control is the hands of superior.||The overall control vests with top management and delegates authority for day to day control to departmental heads.|
|Relationship||Creates superior-subordinate relationship.||A step towards creation of semi-autonomous units.|
Definition of Delegation
The assignment of authority or decision-making power or duty of a person who is at a higher level to an individual who is below his level is known as Delegation. It is a requirement of the all the organisation, for its growth and development.
A delegation of authority refers that the senior is handing over the decision-making powers to his junior. Although, the senior cannot pass on an authority which he does not possess. With the help of delegation, the workload can be divided to different individuals as well as the responsibility is also shared among them. The person who delegates the authority is known as Delegator while the person who is delegated the authority is known as Delegatee.
There are three major elements of Delegation:
- Authority: The rights and powers which are delegated.
- Responsibility: The duties and tasks which are to be performed are delegated.
- Accountability: Reporting on the discharge of responsibility or use of authority is accountability which cannot be delegated.
Definition of Decentralization
The transfer of authorities, functions, rights, duties, powers and accountability of the top level management to the middle or low-level management is known as Decentralization. It is nothing but the delegation of authority, in the entire organisation or it can be said that decentralization is an improvement over delegation. When there is decentralization, the considerable authority, responsibility and accountability are vested to the lower levels of the organisational hierarchy.
Many organisations take decisions regarding the diffusion of authority from a higher level to other levels of management like departments, divisions, units, centres, etc. This dissemination of authority is known as delegation, but when it is exercised in the whole entity, on a large scale, it is decentralization. So here it must be noted that the extent to which the right, duties and powers are disseminated is important.
This is the greatest advantage of decentralization that the top management gets unburden, and timely decisions can now be taken on different matters. Moreover, it will lead to better supervision and motivation of the employees.
Key Differences Between Delegation and Decentralization
The following are the major differences between delegation and decentralization:
- When an authority or responsibility is entrusted to the subordinate by a superior is known as Delegation. Decentralization refers to the final result which is attained when the authority is delegated to the lowest level, in an organised and consistent manner.
- Delegation is the technique of management. On the contrary, decentralisation is the philosophy of management.
- In delegation, only authority and responsibility are transferred but not the accountability. However, in decentralization, all the three are transferred.
- In delegation, there is less liberty of work to the subordinates whereas, in the decentralization, a substantial amount of liberty can be seen.
- Delegation of authority creates superior-subordinate relationship in the organization. conversely, decentralisation is a step towards creation of semi autonomous units.
- A delegation of authority is a must for every organisation, as no person can alone do each and every task. Conversely, Decentralization is discretionary, in the sense that top management may or may not disperse authority.
Delegation and Decentralization both have its merits and demerits. They are not similar terms, but the decentralization is the result of the delegation of authority. So there is no competition between them as they both complete each other.
They are helpful to the success and progress of the organisation, but there is a precondition for the delegation that there should be a desire of the manager to give freedom of work to the persons whom work is assigned. Let them choose the methods and solutions for their problems, in order to guide them and let them learn from their mistakes. In this way, they will get the training and development.
Another prerequisite is that the juniors should communicate with the seniors freely. However, this is a demerit of decentralization, which due to no control of top level management over the middle or low-level management, the absence of coordination and leadership is felt.