Distinction between Delegation and Decentralisation

However, decentralisation should be distinguished from delegation. Delegation can take place from one individual to another to complete the process while decentralisation is completed only when the fullest possible delegation is made to all, or mostly people who are delegated a specific kind of responsibility. If the general manager asks one of the Plant Managers to recruit some executives on his behalf, it is an instance of delegation.

On the other hand, if this authority is delegated to all divisional managers for all cases of recruitment, it becomes a case of decentralisation. Up to the authority to their subordinates, decentralisation is carried further down in the organisation. "If delegation is practiced systematically in all of functions and divisions of the company and for a wide range of authorities and responsibilities, we should say the company is highly decentralised."

The difference among delegation and decentralisation may be highlighted as under :

• Delegation is a process while decentralisation is the end-result of a deliberate policy of making delegation widespread in the organisation.
• Delegation takes place between a superior and a subordinate while decentralisation involves delegations as between the top management and the departments or divisions of the organisations.
• Delegation is a must for management as no manager can get things done through people unless he passes on the requisite authority for the performance of the work assigned. Decentralisation is optional i.e. the top management may or may not decide to disperse authority as a systematic policy.
• In delegation control rests entirely with the delegation but in decentralisation, the top management might exercise the minimum of control in a broad way and delegate the authority for controlling also to the divisions or departments concerned.

The extent of decentralisation is judged on three tests:

• What kind of authority is delegated? Is it authority to plan and decide?
• How far down in the organisation is it delegated? (Does it go down to the lowest supervisory level?) and
• How consistently is it delegated?

On the whole, a centralised organisation is one in which detailed and comprehensive planning is done by the chief executive or by a small group of high-level managers. Most decisions are made at the higher managerial level in centralised organisation. On the other hand, in a decentralised organisation operating decisions are pushed down to the lowest level.