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Question
Differentiate between centralization of authority and decentralization of authority.
Answer in Brief
Solution
| Point of difference | Centralization | Decentralization |
| (i) Meaning | It refers to the concentration of power or authority’ at a higher level only. | It refers to every distribution of powers and authority at every level of management. |
| (ii) Authority at different levels | Top management retains maximum authority. The authority with middle and lower management is very low. | The authority is systematically divided at every level. |
| (iii) Suitable | It is suitable for small scale and small size organisations. | It is suitable for large scale organisations. |
| (iv) Freedom of Actions | Managers have less freedom of actions | Managers have more freedom of action. |
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Comparison Between Delegation and Decentralization
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Decentralisation of authority implies a systematic dispersal of authority at all levels of management for decision making. In the light of the above statement, explain any four merits of Decentralisation in an organisation.
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