Delegation and decentralisation

The essentials

Delegation is the downward transfer of authority from a superior to a subordinate. It allows a manager to share the workload while remaining accountable. Decentralisation is the systematic delegation of authority at all levels of management and in all departments, except for authority that can only be used at the top. Delegation is a process; decentralisation is the end result when delegation is spread widely.

Key points

• Elements of delegation: authority (the right to command and take decisions), responsibility (the obligation of the subordinate to perform the duty assigned), and accountability (being answerable for the final outcome).
• Authority can be delegated; responsibility cannot be entirely delegated; accountability cannot be delegated at all.
• Authority flows downward; responsibility and accountability flow upward.
• Importance of delegation: effective management (managers can focus on important matters), employee development, motivation of employees, facilitates growth, basis of management hierarchy and better coordination.
• Importance of decentralisation: develops initiative among subordinates, develops managerial talent for the future, quick decision-making, relief to top management, facilitates growth and better control.
• Differences: delegation is compulsory for work to be done, decentralisation is an optional policy decision of top management; delegation gives less freedom of action, decentralisation gives more; delegation is a process, decentralisation is the result of delegation at all levels; delegation is narrower in scope.

Exam tips

• If a manager delegates a task and the subordinate fails, the manager is still accountable to the superior.
• Remember: authority should be equal to responsibility.

Common mistakes

• Saying accountability can be delegated. It always remains with the delegator.
• Treating decentralisation as the opposite of delegation. It is an extension of delegation.