Decentralization of Authority

Decentralization is the systematic effort to delegate to the lowest level authority except that what can only be exercised at the central point .Decentralization is the opposite of centralization which is the systematic and consistent reservation of authority in a few hands at top. Decentralization implies a greater power to persons and places away from the center. It also means a lot of important decisions will be made at the lower levels without being subjected to prior approval of higher authority.


  • Nature of growth of the enterprise.
  • Outlook of top management
  • Size of and dispersal of operation
  • Extent of dispersion
  • Nature of functions.
  • Availability of able management.

Advantages of decentralization

  • Relief of top management
  • Motivation of subordinates.
  • Intimate relationships
  • Sense of competition
  • Effective control

Disadvantages of  decentralization

  • lack of control
  • Costly
  • Lack of able managers

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