Delegation of Authority and Centralization

Meaning of Delegation of Authority

The downward transfer of authority from a manager to a subordinate known as delegation enables that person to use resources and make choices. Thus, delegation is the act of giving responsibility for completing the work to someone else who is qualified to do so. Division of labor and responsibility sharing go hand in hand with delegation of authority. On the basis of competence, superiors grant subordinates the authority to take action or make decisions. The superior can exercise competence, the right to take action or make decisions through delegating authority. By giving authority to subordinates, superior can focus on more crucial activities. Their subordinates can handle their day-to-day operational responsibilities.

To carry out all functions, exercise managerial control efficiently, and reduce duplication and overstaffing of tasks, there must be a clear flow of authority and responsibility from top to bottom in the company. However, managers must correctly allocate authority if they are to effectively run their departments. They should, at the very least, give their key employees the authority they need to complete the work, take initiative, and maintain productivity while they are away. This involvement can improve an individual's job satisfaction and frequently leads to improved job performance.

Characteristics of Delegation of Authority

The following are some characteristics or features of delegation of authority:

• Responsibility: Responsibility and authority must always coexist. If a subordinate is given the go-ahead to complete a task, he should share equal responsibility for carrying it out correctly. He should also have enough power to finish the duty that has been given to him.
• Performance Monitoring: Authority should be delegated in terms of the desired outcomes. The performance goals must be made explicit. Monitoring subordinate performance is necessary to ensure efficient delegation. Even after giving authority to subordinates, the superior has the right to keep an eye on their performance.
• Absoluteness of responsibility: While accountability cannot be assigned by a management, authority may. The manager is accountable for the actions of those to whom he assigns responsibility for any work, including his subordinates.
• Unity of Command: Only one subordinate should be given authority at a time by a superior. In other words, only one superior should be in charge of a subordinate at once. This is required to instill in subordinates a sense of responsibility, discipline, and loyalty.
• Acceptance: The ability of the subordinates to accept delegation determines the amount of authority that is delegated. It implies that subordinates must be ready to accept the authority given to them.

Tasks for Effective Delegation

A few things must be completed before a delegation of authority can be effective. As was before mentioned, Freemen and Gilbert (1996) state that the following activities are necessary for efficient delegation:

• Decide which tasks can be delegated: The management must choose which tasks to assign. Minor decisions and recurrent tasks are simple to outsource. However, subordinates must be trained and developed in order to be assigned difficult and demanding higher level jobs.
• Decide who should get the assignment: Who in the department is qualified to handle the task that has been assigned? Who has the necessary time, skills, and expertise to complete the task? Who should receive the assignment is determined by these and related additional questions.
• Provide resources for carrying out the delegated tasks: Task delegation won't be successful without the support of resources like money, staff, and time. Therefore, resources should be properly allocated for the completion of activities that have been delegated.
• Delegate the assignment: Information exchange between the manager and his subordinate is another requirement of delegation. Effective delegation most definitely requires open communication.
• Be prepared to run interference, if necessary: The manager needs to be prepared to take back tasks that have been delegated if they are not completed.
• Establish a feedback system: Continuous feedback is required to guide and advise the subordinate and, if necessary, make course corrections midway through.

Advantages and Disadvantages of Delegation of Authority

Advantages:

• Managers have the chance to ask for and accept more responsibility from higher-level management when they delegate.
• Top management's workload is decreased by delegation. It can focus on crucial and tactical topics.
• Employees who are delegated tasks are more likely to take responsibility and apply discretion. Their initiative and self-confidence are boosted as a result.
• Because the decision-maker is close to the activity or location and has a good understanding of the facts, delegation produces better conclusions.
• Making decisions is also accelerated by delegation. Lack of delegation forces lower-level employees to request approval from managers before acting. This can take a lot of time at times.
• Developing managers and staff in decision-making through delegation is crucial. They develop a sense of responsibility as a result of this.

Disadvantages:

• Employees could make an effort to avoid or accept more duties. They would rather have all decisions made by their superiors.
• Some managers lack confidence and trust in lower-level staff, which makes delegation difficult.
• The managers' understanding of their authority and that which they can delegate is sometimes clouded by the ambiguous job titles.
• Another obstacle to efficient delegation is the worry of competition from below. Some managers can believe that if their employees succeed, it could hinder their career advancement.
• Employees could be hesitant to take on more responsibility if there are no additional financial rewards for doing so.

Meaning of Centralization

The propensity to reserve decision-making authority for higher levels of management is referred to as centralization. It suggests that people making the majority of the decisions about the work do so from a position above them in the organization. Centralization refers to the retention or concentration of management power in a small number of crucial top-level managerial jobs.

In other words, centralization describes the extent to which authority and decision-making are reserved for key locations within an organization. It describes where the important managerial positions at the nerve center of an organization—the highest level—are where decisions are made. In other words, centralization refers to any process that lessens the influence of subordinates in decision-making. In a centralized organization, workers at the middle and lower levels of the hierarchy must wait for top management instructions before starting duties. Top management is therefore more significant in a centralized organization. In a one-man business, total centralization is feasible.

Advantages and Disadvantages of Centralization

Advantages:

• In a centralized or autocratic organization, top level management retains ultimate decision-making authority. One manager making all the decisions allows for quicker decision-making.
• Eliminating overlapping or redundant activities is made easier by centralization. Thus, it contributes to significant cost reductions.
• Having top management make all decisions while an organization is in crisis or at risk of failing provides benefits. Specialists can be used in this circumstance to control the crisis. When decisions must be made in an emergency that affects all units, centralizing decision-making is highly desired.
• For making decisions in a stable setting, centralization is best. The decision-making process for programs is addressed.
• The requirement for centralization increases as job specialization increases. The most effective management for tall hierarchical organizations with the functional department is centralization. Centralization makes it easier to coordinate and manage between departments.
• Centralization is advantageous in an organization when lower-level personnel lack the capability and expertise to use decentralized authority.
• A centralized structure guarantees consistency in operations, uniformity in decision-making, and the appropriate application of control mechanisms for the organization's smooth functioning.

Disadvantages:

• Because all decisions are made at the highest level, there is a significant probability that they will be delayed. The task of the subordinates can also take longer to complete. In the current context, this delay could cost the business money.
• To govern a diverse and geographically scattered organization, centralization is inappropriate.
• Routine decisions are those made by programs. They are comparatively simple choices. Such choices burden senior management, which is inappropriate for the centralized organization.
• Middle and lower level managers will be hesitant to carry out the decisions made by top management if they aren't as active in the decision-making process and aren't frequently invited to participate in planning. This occurs as a result of their lack of ownership over such planning and decision-making. Similarly, a lack of trust may have an impact on how effectively an organization operates.
• Top management will be overburdened with duties in companies where authority and power are strongly concentrated. In such a situation, it would be challenging for top management to focus on other tasks like managing resources and fostering relationships with other people.
• The development of subordinates' management skills is hindered by centralization. Due to their lack of participation and involvement in decision-making, their abilities and talents go unused. The motivation, morale, and job satisfaction of lower level managers are negatively impacted by this. As a result, people start to favor assigning responsibilities further up.
• Lower and middle-level managers participate less in tasks like planning and decision-making in centralized firms. They have less opportunities to learn management techniques in such a circumstance. They might not have the opportunity to hone their managerial skills.

Reference

(Pant, P.R. (2013). Principles of Management, Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd.)