Decentralization

  Ø  When decision making power or authority is dispersed or disturbed throughout the organization, it is called decentralization. Supervisors, unit manager, departmental managers and all divisional managers will have sufficient authority. Therefore, decentralization is the systematic effort to delegate to the lowest level all authority except that reach can exercised at central level. It is pushing down authority and power of decision making to the lower level of organizations. The centers of decision making are dispersed throughout the organization. However, the transference of authority from higher level to lower level.

As the organization grows in size and complexities, decentralization tends to increase. The faster the rate of organizational growth the greater the need for decentralization. The top management cannot undertake all the work load. Hence, top management divides top workload into several parts and they are assigned to divisions, departments and units required authority are given to them for the accomplishment of assigned task. Under decentralization departmental managers, unit managers and section heads can take decisions independently. Decentralization particularly is important when business environment is fast changing and decisions must be made quickly as well.