Centralization, Decentralization and Delegation

Centralization: The retention of decision-making authority by top management.

Decentralization: The sharing of decision-making authority by management with lower-level employees.

The Need for Balance: The challenge to balance the need for responsiveness to changing conditions (decentralization) with the need to create low-cost shared resources (centralization)

Factors in Relative Centralization/Decentralization

Effective Delegation

Delegation: Assigning various degrees of decision-making authority to lower-level employees

Advantages of Delegation

—  Frees up managerial time for other important tasks

—  Serves as a training and development tool for lower-level managers

—  Increases subordinates’ commitment by giving them challenging assignments

The Delegation Continuum

Barriers to Delegation

—  Belief that only you can do the job right

—  Lack of confidence and trust in lower-level employees

—  Low self-confidence

—  Fear of being called lazy

—  Vague job definition

—  Fear of competition from those below

—  Reluctance to take risks that depend on others

—  Lack of early warning controls

Poor example of bosses who do not delegate.