Delegation of Authority
Delegation is the process by which authority passes from one organizational level to another. But for delegation of authority, organizations would remain forever small. Delegation is the only solution to cope with the increasing work load of managers as the organization grows. Because of the-constraints of time and ability, a manager cannot perform all the tasks himself. Therefore, he delegates certain of the tasks to the subordinate and gets, them done.
The process of delegation has the following steps:
a) Entrustment of duties or assignment of responsibilities
b) Granting of authority:
c) Creation of accountability:
Entrustment of duties or Assignment of responsibilities
This is a crucial step in that a few important questions like what to delegate? when to delegate? whom to delegate? and how to delegate are answered. The effectiveness of delegation depends on how clearly these questions are answered. First of all, the manager has to decide the tasks to be delegated to the subordinates. For this, he must be able to distinguish between the routine and non-routine tasks, Routine and single tasks can as well be performed by the subordinates while the non-routine and very important tasks must be performed by himself.
Granting of authority:
When the subordinates are assigned certain tasks or responsibilities. it goes without saying that they need authority also to perform the tasks. Authority is required by them to make use of the resources of the organization in the execution of the tasks. The superior therefore, parts with his authority to enable the subordinate to perform. Responsibility and authority both go together. One of the Important principle of organizing - parity of authority and responsibility emphasizes the need for a proper balance between the two.
Creation of accountability:
Delegation does not end with just entrusting of duties and the granting of authority. The superior has to create an obligation on the part of the subordinate to perform. In other words, the subordinate is accountable to his superior for the tasks delegated. Thus, while authority flows downwards, responsibility flows upwards. Normally, accountability is created by asking the subordinate to submit performance reports / status reports from time to time.
Decentralization of Authority
The term 'decentralization' should not be confused with that of delegation. Although the two are closely related decentralization is much more wider in scope reflecting management's philosophy regarding which decisions to be taken at the top as well as down the line in the organization. While in delegation authority is transferred on one-to-one basis from the superior to the subordinate.
Decentralization of authority is broader in scope and involves the transfer of authority in the organizational context from top to the lower rungs of management In the hierarchy. Thus the greater the amount of authority delegated throughout the organization. The more decentralized the organization is it must also be understood that both absolute centralization and absolute decentralization are undesirable for the former refers to an autocratic structure while the latter results in a chaotic situation. For this reason, decentralization must be viewed as a relative concept. not as an absolute one.
Ernest Dale a well-known management writer has described the following conditions where decentralization is greater:
•The greater the number of decisions made lower down the management hierarchy. •The more important the decisions made lower down the management hierarchy. For example, the greater the sum of capital' expenditure that can be approved by the plant manager without consulting anyone' else, the greater the degree of decentralization in this field. •The more functions affected by decisions made at lower levels. Thus, companies which permit only operational decisions to be...