Delegation, Centralization and decentrailzation of authority

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Delegation

The active process of entrustment of a part of work or responsibility and authority to another and the creation of accountability for performance is known as delegation. Thus, there are three elements of delegation as follows-

  • Assignment of Responsibility: This is also known as entrustment of duties. Duties can be divided into two parts: one part, that the individual can perform himself and the other part, that he can assign to his subordinates to perform.
  • Granting Authority: Authority refers to the official powers and position required to carry on any task. When duties are assigned to subordinates then the required authority must also be conferred to himCentralization-Vs-Decentralization
  • Creating Accountability: The delegatee is fully answerable to his superior for performance of the task assigned to him. Thus, the superior ensures performance through accountability by his subordinate.

Decentralization

Decentralisation refers to a systematic effort to delegate authority at all levels of management and in all departments. This shifts the power of decision making to lower level under a well considered plan.

Decentralisation has number of benefits. Firstly, it reduces the workload of the top level management. Secondly, it motivates the employees and gives them more autonomy. It promotes initiative and creativity. It also helps employees to take quick and appropriate decisions. In this process, the top management is freed from the routine jobs and it enables them to concentrate on crucial areas and plan for growth.

Distinction between Delegations and Decentralisation

Decentralisation is not same as delegation. The points of differences are –

  • While delegation is the process of assigning responsibility and authority and thereby creating accountability; decentralisation is the ultimate outcome of planned delegation.
  • Delegation of authority takes place between the manager and his subordinates while decentralisation involves the entire organisation, and is between top management and divisions/departments.
  • Delegation is done to speed up the work and is essential in trace; while decentralisation is optional and is usually done in large scale organisations.
  • In case of delegation the responsibility and authority delegated may be withdrawn by the delegator; which is not so easy in case of decentralisation.

Centralization

Centralized authority refers to an organizational management structure where most of the major decision-making power and authority rests in the hands of a concentrated group of leaders. Often, this team of executives works in a company headquarters or main office.

A unitary system of governance has the highest degree of centralization. In a unitary state, the central government holds all the power. Lower-level governments, if they exist at all, do nothing but implement the policies of the national government. In a purely unitary state, the same set of laws applies throughout the nation, without variation. Unitary states create national policy, which is then applied uniformly. This uniformity sometimes serves as an advantage because people and businesses know exactly what to expect from the laws, regardless of geographical location. At the same time, to maintain its uniformity, a unitary government must overlook local differences that might call for different rules or policies.

Example: Most absolute monarchies and tyrannies operate under unitary systems. But democratic unitary states exist as well. In France, for example, the central government makes virtually all of the decisions.

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