DECENTRALIZATION WITH CENTRALIZATION
Centralization is the process where decisions are made from the top levels of the organization. An typical example of centralized structure would be the traditional pyramid organization.
Definition: The concentration of authority for most decisions at the top level of an organization. Top level of the organization ensures that the decision made by management are being followed by the other levels of organization.
Decentralization is the process where decisions are made from various levels throughout the organization. Most of the modern structures that are developed today, utilize decentralization over centralization.
Definition: Is the dispersion of authority to make decisions throughout all organization levels. The responsibility of making various decisions is given to different levels of the organization in order to involve all levels of the organization in the decision process which increases the flow of ideas.
Most modern organizations have the ability to operate with greater decentralization without losing centralized control. This is made possible due to new technology, such as computer networking. Owners have the opportunity to monitor the decision made by the different levels of management in the organization, and if a wrong decision is made, the owner is informed about the decision and actions are taken to rectify the wrong decision. This is beneficial to organizations that have branches in various countries and allows the owner to be aware of the operations of the business.
MORE DELEGATION AND EMPOWERMENT
Managers must decide what work should they themselves do and what should be left for others.
Delegation: the process of entrusting work to others by giving them the right to make decisions and take action.
3 Steps to Delegation:
1. Manager assigns responsibility by carefully explaining the work or duties to the employees
2. Manager grants authority to act. Along with the assigned task, the right to take necessary actions is given to the employee in order to get the task done properly.
3. Manager creates accountability. By accepting an assignment, the employee takes on a direct obligation to the manager to complete the task as agreed with the manager
Principal of organization states that managers should not delegate without giving employees enough authority to perform. When insufficient authority is delegated, it will be very hard for the employee to get the task done and to meet the performance expectations.