Organizing

Organizing is a process of identifying activities and resources, grouping them on the basis of nature, forming structure, assigning the job, providing rights and duties and establishing the relationship between them. It is the process of forming organizational structure and technology. It is aimed at achieving the organizational objective.

What is Organizing ? 

Organizing is the next important function of management which involves arranging and structuring the work which is required to accomplish the organizational objectives. Normally organizing is known as structure, process, a group of people and function of management. To understand the concept of an organization, it is necessary to define the following terms.

• As a structure:
  Organizing as a structure refers to a hierarchical arrangement of the position of the members and the department of an organization. It shows authority and responsibility relationship among the members. It identifies who is to command and who is to obey. It is the mechanism to direct, coordinate and control the activities. It is the static concept that cannot be changed easily and quickly.

• As a process:
  Organizing as a process refers to the identification and grouping of activities to be done, assigning duties to the people, creating authority responsibility relationship and coordinating activities among the members and departments. It normally determines, arranges, group and assigns the task to its members. It is a dynamic concept as the activities can be arranged and changed according to the requirements of the company.

• As a function:
  Organizing is an important function after planning. The manager of the company organize or collect resources such as manpower, money, material, machine, methods, etc. They are needed to put the action on the track. Without organizing function, it is not possible to move forward.

• As a group of people:
  Organizing is the group or association of certain people created for certain specific economic interests or non-economic interests. It is guided by the policy or the rules of the company, school, colleges, hospital, government office, club, etc.

Principle of Organizing

The principle of organizing guides the organizing function of management. Some principles are:

1. Scalar Principle:
   It is also known as the ‘chain of command’. It is an unbroken line of command/ authority from the top level to the bottom of an organization. This chain of command should be short and clear. If it could be, the decision-making and communication will be more effective and efficient.
   
   
2. Principle of flexibility:
   The organizational structure should be flexible. It should be adaptable to changing circumstances or situations. It should easily permit any expansion and replacement without dislocating the basic design of the organization.
   
   
3. Principle of authority:
   Authority means the right and power. It is the tool that makes the manager able to accomplish the desired goals. Hence, the authority of each manager should be clearly defined and it should equal responsiveness.
   
   
4. Principle of delegation:
   Under this principle of delegation of authority, rights, and power should be equal to responsibility so as to enable each manager to accomplish the task assigned to him/her.
   
   
5. Principle of unity of command:
   According to the principle of unity of command, each subordinate should have one superior, whose command has to be obeyed. If a person is to receive a direction from several superior, it may result in confusion, chaos, conflict, and indiscipline. So, there should be unity of command in an organization.
   
   
6. Principle of the span of control:
   The span of control is a principle or it is a device, with the help of which a number of subordinates can be controlled, their number can be determined and the activities can be supervised. A manager cannot handle an unlimited number of subordinates. Hence, it guides and helps to determine the numerical limit of subordinates to be supervised or controlled by the manager. If the numbers of subordinates are limited, a manager can control and supervise effectively. But the number of subordinates may vary depending upon the nature of the job, the competence of the manager and the quality of subordinates.
   
   
7. Principle of unity of objectives:
   Organizing helps to achieve the goals and objectives of the organization which affects the organizational structure. So, the goals and objectives of an organization should be clearly defined. The objectives should be defined very clearly for each department, for each section and even for each position of the organizational structures. All the objectives should be unified in such a way that it could facilitate to concentrate all the efforts towards the attainment of an organizational goal.
   
   
8. Principle of efficiency:
   The organization should increase its efficiency in such a way that the cost or expenditure of the mission and objectives of the enterprise below. An efficient organizational structure helps to operate the resources efficiently. Hence, it ensures optimum utilization of resources.
   
   
9. Principle of a division of works:
   The division of work can be created where the separate nature of jobs can be performed. Effective departmentation as per the work and task can be created and it is an important principle of the organization.
   
   
10. Principle of unity of direction:
    There should be one objective (unified objective) and plan for the group activities. If it could be a direction from the superior it will be the same to all subordinates. All the subordinates will be receiving the same direction in their respective works and thus under this principle of unity of direction, they will be free from dilemma about obeying diversified direction. This will also facilitate the verification and coordination of activities.
    
    
11. Principle of simplicity:
    This principle emphasizes the simplicity of the organizational structure. If there exists a long member of levels in an organization, there is a possibility of difficulty in communication and coordination. It clears that the activities and the system of an organization should be simple and easy to understand.
    
    
12. Principle of responsibility:
    The principle of responsibility makes the superior responsible for their authority. In a sound organization, the superior is responsible for the performance of subordinates. The authority can be delegated but not responsible.
    
    
13. Principle of balance:
    There should be a proper and reasonable balance in works and activities and the size of departments within the organization. Further, there should also be a reasonable balance between centralization and decentralization. Overemphasis of any type and preferences to anyone should be avoided.
    
    
14. Principle of specialization:
    The principle of effective organization provokes specialization. Under this principle of specialization, the total task of an organization is divided in such a manner that every person is confined to a single and particular job, which leads to specialization of work.

Organizing Process

Organizing is a process of maintaining the flow of work and information and grouping of activities, identification of authority and responsibility of employees in the organization. Various steps of organizing process are as follows:

1. Determination of objectives:
   In the first step of the organizing process, the objective of the enterprises is to be determined. This determination of objective is the basis of organizing a process of the enterprise. Without determining objectives, an organizational process will not proceed and organizing function will become meaningless. Virtually, the organization structure is so designed which could help to accomplish the objectives. Thus, the organization should have a clear objective to achieve its goal.
   
   
2. Identification of activities:
   The next step in organizing is to identify and determine the activities to be performed in order to achieve the goals. The activities should be identified considering the present and changing environment. The total work of the organization is systematically divided into various activities and sub-activities. It facilitates the assignment of duties and delegation of authority.
   
   
3. Grouping Activities:
   After identifying the necessary activities closely related and similar activities are grouped into divisions and departments. The act of grouping of activities is called departmentation. Activities may be grouped on different bases. For example; functions, products, territories, customers, etc.
   
   
4. Allocation of duties and responsibility:
   The fourth step in the organizing process is the assignment of the duties and responsibilities. This assignment of the job should be based on the ability and capacity of the person to be assigned. Organizing has to allocate the duties and responsibilities of the person very carefully so as to achieve the departmental as well as organizational goals.
   
   
5. Delegation of Authority:
   The delegation of authority is the most important device to ensure the attainment of goals. Under the organizing process, top-level management should delegate authority to lower-level management. While delegating authority, the responsibility should be delegated too otherwise, it will be meaningless. So, authority and responsibility should be balanced.
   
   
6. Coordination:
   In the last step of the organizing process, coordination is given due emphasis. For the successful operation of any organization, there should be proper and effective coordination between the activities and efforts of various departments.

Organizational Structure

Organizational structure is the network of authority and responsibility to the member. It is the mechanism that highlights position, department, and level of management. The structure is selected according to its requirements. Normally, the structure depends on the size of the organization. The common structure of the organization is as follows:

• Line organizational structure:
  It is the simplest and oldest form of organizational structure. It is also known as a military organizational structure because it is developed by the military. It is the organizational structure where authority flows downward and responsibility upward. It means order and instructions, communication, etc . flows upward to the manager. In this structure, there is direct lineup authority from top to bottom level through the unbroken chain. It has a good working relationship between superior to a subordinate level, i.e. from top to bottom. The principle of unity of command, scalar chain, a span of control, etc is strictly followed in this structure. The manager is independent in his area. Similarly, subordinates become responsible to the concerned manager for their performance. It is normally suitable for a small organization. 
• Line and staff organizational structure:
  It is the next type of organizational structure. It is an extended form of line organizational structure. In such an organization, there is line authority and staff authority. It means the line manager and staff manager both are involved in performing the managerial activity. The line manager commands the subordinates and staff managers to make a plan and suggest the line manager. In a large organization, it is not possible for the line manager to perform various activities by themselves. So, they need the support of a specialist for doing the job properly. In this organizational structure, there is the provision of a chain of command as well as the provision of a functional specialist. Such as legal expert, financial advisor, labor experts, etc to provide suggestions to line managers in decision making.
  
  The functional staffs are responsible for the preparation of the plan while line authorities are responsible for the implementation of the prepared plan. Functional staffs are involved in only advisory work and have no authority to give action to the line manager and subordinates.
• Functional Structure
  The organization is separated into different segments based on the functions while managing. This allows the organization to enhance the efficiencies of these functional groups. As an example, take a software company. Software engineers will only staff the entire software development department. So, the management of this functional group becomes easy and effective.
  
  Functional structures appear to be successful in a large organization that produces high volumes of products at low costs. The low cost can be achieved by such companies having efficiencies within functional groups.

Importance of Organizing as Management Function

1. Training and development:
   A sound and effective organizing function offer good scope for the development of managerial ability and competency by providing training. It also helps the management to improve competency through proper delegation of authority.
   
   
2. Provides optimum use of new technology:
   A sound organization is always flexible. It should have the capacity for absorbing changes in the environment. Hence, according to the situation and on the demand, it helps and lets the management for the proper and optimum use of technological improvement.
   
   
3. Effective and efficient administration:
   The organizing function defines the various activities and authority relationships in the organizational structure. Sound organizing function helps the management in many ways. For example, it helps to avoid confusion about the efforts. It is the mechanism with which the management directs, controls and coordinates the various functions of the enterprise.
   
   
4. Optimum utilization of human resources:
   A good organization utilizes human resources properly. It places the right person in the right jobs in the right position and the right department. By matching interests and jobs, there would be optimum use of an individual.
   
   
5. Facilitates growth and diversification:
   A sound and effective organization contributes to the growth and diversification of the enterprise through effective management. It is always accepted as truth that sound organization helps the management to implement decentralization, through which management can enhance its strength and then become large in its shape and size.
   
   
6. Effective coordination and communication:
   It is only the organization of the enterprise, which maintains coordination and establishes communication among various departments and individuals, along with a different level of the staff. It helps to establish a structural relationship between different jobs and positions. It also fixes the channel by communicating among different members.
   
   
7. Productivity and job satisfaction:
   The productivity of human resources can be increased when personnel of any organization is free to exercise their ideas. This is possible only in the organization where democratic and participative management exists.

Departmentation

The process of making departments in the organization is known as departmentation. It is the process of grouping related activities into different units. Departmentation further is the process of arranging, dividing and analyzing the activities in such a way so that they will be managed properly. It is the way of dividing long and complex organizations into smaller administrative units.

The department is an important task in defining the organizational structure. The department in the organization may be known by different names such as unit, division, section, etc.

Departmentation basically increases the operating skill and efficiency of the organization. It provides various benefits such as division of work, specialization, fixation of responsibility, evaluation of performance, development of manager, freedom, job satisfaction, motivation, administrative and financial control and so on. Departmentation may be done on the basis of product, function, territory, consumer, etc. Departmentation is the logical process of grouping similar nature activities into manageable units. It is the process of combining jobs into groups.

Types / Methods of Departmentation

• Departmentation by Function:
  It is a common and popular method of departmentation. Under this method, total organizational work can be divided into different functions such as the production department, finance department, marketing department, human resource, etc. Such departmentation is essential for the survival and maintenance of the organization. The departmental managers are responsible for controlling the activity of their department and all these departmental heads are experts and specialize in their own area of work. They can formulate the process for the betterment of their own department.
  

  Advantages:

  1) Efficiencies from putting together similar specialist and people with common skills, knowledge, and orientations

  2) Coordination within the functional area

  3) In-depth specialization

  Disadvantages:

  1) Poor communication across functional areas

  2) Limited view of organizational goals

• Departmentation by Product or Service:
  It is another suitable method of departmentation for an organization producing a variety of products. Under this method, the product or product line forms the basis of departmentation. All the major functions such as production, marketing, finance, etc. are brought under a particular product for proper management. This is essential for proper evaluation of the product
  

  Advantages:

  1) Allows specialization in particular products and services

  2) Managers can become experts in their industry

  3) Closer to customers

  Disadvantages:

  1) Duplication of functions

  2) Limited view of organizational goals

• Departmentation by Territory:
  It is the other method of departmentation for an organization having business in different territories or location. It is appropriate for a large-scale organization that is geographically spread out in many locations like a bank, insurance companies, transport companies, etc. Under this method, the location may be selected according to the requirements of the organization. It may be district wise, zone wise, country wise, development region-wise, etc. Regions are the basis for departmentation under such a method. This method is suitable for the evaluation of the business in terms of location
  

  Advantages:

  1) More effective and efficient handling of specific regional issues that arise

  2) Serve needs of unique geographic markets better

  3) Local customer priority

  4) Environmental adoption

  Disadvantages:

  1) Duplication of functions

  2) Can feel isolated from other organizational areas

• Departmentation by Customers:
  Departmentation by customers is that method of departmentation in which enterprise is divided into a number of departments on the basis of customers that it serves. Usually, it is observed that the enterprise deals with a variety of customers, especially big and large organizations provide special services in different types of customers. That’s why, under this method of departmentation, activities are grouped on the basis of types of customers it serves, handles contracts and deals
  

  Advantage:

  1) Customers' needs and problems can be met by specialist

  Disadvantages:

  1) Duplication of functions

  2) Limited view of organizational goals

• Departmentation by Process: Under this form, departmentation is done on the basis of several discrete processes or technologies involved in the manufacturing process of a product. Hence, the activities are grouped on the basis of such a process. For example, a vegetable oil processing and manufacturing enterprise may have a separate section in its processing and manufacturing department such as crushing, refining, finishing and packing sections in which the process, as well as equipment used, are found different.
  

  Advantage:

  1) The more efficient flow of work activities

  Disadvantage:

  2) Can only be used with certain types of products

• Departmentation by Time: In this method of departmentation, activities are grouped on the basis of the timing of their performance. This is the oldest form of departmentation generally used at lower levels of the organization. If it is the case of the production department of any manufacturing department, the production function can be divided into different shifts like morning shift, day shift, and night shift. Even an educational institution may have a separate department for the day, evening and correspondence courses to impart education to full-time students, locally employed students, and outstation students respectively.

Authority 

It is a formal right of the superior to command and compel his subordinates to perform the works assigned to them. Authority is a kind of right and power –even though the authority is different from power – to guide and direct the actions of others so that the organizational goals could be achieved. Authority is vested in a particular position not to the person, because, authority is given by an institution and is, therefore, legitimate or legal. Thus, authority denotes those legal, conventional and systematized rights and power through which any person, authorized or empowered, can perform his duty and responsibility, can compel other to perform the duty, order or direct the subordinates, motivate the people belonging to the organization and makes the organization legally responsible towards the third party for his action. Thus, we can understand the term ‘authority’ as the power to direct, issue orders, compel obedience, guide and utilize the organizational resources.

Responsibility

Just as the authority is the right/ power of a superior to issue a command or compel the subordinates to do or not to do, responsibility is the obligation of the subordinates to obey those commands. It means, when superior assigns any works to subordinates, it becomes a responsibility to perform the same. The responsibility is an obligation to perform a certain function assigned to achieve certain results in the organization.

Responsibility has two dimensions. One may be expressed as, ‘Responsibility for’ and another as ‘Responsibility to’. ‘Responsibility for’ relates to an obligation to perform certain duties written or given in his job description. Particularly, in an organization, two types of responsibilities are found, they are operating responsibility and ultimate responsibility. The subordinates assigned to them, where the superior retains ultimate responsibility for getting the job done. If the subordinates fail to perform the job (operating responsibility), the superior is held responsible for the failure.

Theo Heimann- "Responsibility is the obligation of a subordinate to perform the duty or required by his superior."

Accountability

Accountability is related to both authority and responsibility. It is neither authority nor responsibility. The obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner. Accountability is something more than responsibility. It refers that a subordinate is answerable under his obligation. An accountant is accountable for the integrity and accuracy of the financial statements even if errors were not made by them. Managers of a company may try to manipulate their company's financial statements without the accountant knowing. There are clear incentives for the managers to do this, as their pay is usually tied to company performance. This is why independent outside accountants must review the financial statement, and accountability forces them to be careful and knowledgeable in their review.

Delegation of authority

The term 'delegation of authority' means granting or providing certain rights and powers from superior to a subordinate on the basis of their responsibility. In other words, it is the process in which superior assign works or jobs to the subordinate on the basis of their knowledge, skills, and experiences and provides decision-making power for better performance. It is the best means to motivate the employees without providing additional benefits and supports. It is an important tool or element for organizational success because, without delegation of authority, no one can perform their jobs or work as per the organizational requirement.

According to Louis A. Allen," Delegation is the dynamics of management, it is the process a manager follows in dividing the work assigned to him so that he performs that part only because of his unique organizational placement, can perform effectively and so that he can get others to help him with what remains."

According to Douglas C. Baril, "Delegation refers to a manager's ability to share his burden with others. It consists of granting authority or the right to decision making in certain defined areas and charging the subordinates with responsibility for carrying through an assigned task.'

Principle of Delegation of authority

1. Principle of parity of authority and responsibility:
   It is the most important principle of delegation of authority. There is equality in the assigned task and power or right to accomplish the same. The authority to the subordinates is given by superior on the basis of the task assigned to them. Neither more nor less to the task. If more authority is delegated, possibly, they may not utilize their authority in a proper way, and if less authority is delegated, perhaps, it may be difficult to accomplish the task.
   
   
2. Principle of absoluteness of responsibility:
   The term ‘responsibility’ means an obligation to do jobs or works. It is also related to providing certain work or jobs to a different individual on the basis of their knowledge, skills, and experience. In the name of a delegation of authority, the manager or superior should not be free from their responsibility.
   
   
3. Unity of command:
   According to this principle, there should not be more heads commanding one head. In other words, there should be a single boss or superior in an organization. It means a subordinate can receive the order and responsible for a single superior at the same time. Multiple bosses create confusion and conflict in the workplace.
   
   
4. Principle of a functional definition of authority and responsibility:
   Authority and responsibility should be well-defined, to be clear about the limit of one’s rights, duties, responsibility, and accountability. If it could be, it will help the subordinates to learn the limits of one's rights, duties, responsibility, and accountability.
   
   
5. The scalar chain:
   According to this principle, authority flow from top to down. This scalar chain is the basis of the relationship between senior and subordinate. The scalar chain emphasizes that the relationship between superiors and subordinates is much clear and the delegation of authority will be easier.
   
   
6. Management by exception:
   Management by exception is a way for managers to effectively save time and more efficiently run their department or business. Management by exception usually is most effective when managers have control over the problem areas. That way they can change processes to improve the company.
   
   
7. Principle of delegation by result expected:
   Authority should be delegated to accomplish the expected result. The performance targets should be clearly stated.
   
   
8. Acceptance:
   Subordinates should be delegated to accomplish the expected result. Subordinates should be willing to accept the delegated authority.
   
   
9. Performance monitoring:
   The performance of the subordinate should be monitored by the superior to make them move in the right direction towards achieving organizational goals. It also makes delegation of authority effective.

Barriers to Delegation of Authority

A delegation of authority is important for organizational success because, without delegation of authority, no one can perform jobs or work as per the organizational requirement. However, it is not free from certain limitations or problems. All these problems are considered as barriers to a delegation of authority. They are discussed below:

1. Reluctance to delegate:
   A manager may feel reluctant to delegate authority. Some managers are disorganized. They do not plan in advance. Their job description can also be vague. They want to make all the decisions themselves.
   
   
2. Fear of subordinates:
   Some managers are afraid of their subordinates, they think that if rights and powers are to be delegated then the subordinate will perform well.
   
   
3. Lack of trust:
   Some managers have a conservative attitude and traditional faith. They do not believe in their subordinates. They believe in the “Do it yourself” principle. They don’t want to take the risk from a delegation of authority.
   
   
4. Incompetence of subordinates:
   An organization has a large number of individuals to perform organizational works or jobs. Some subordinates may have limited knowledge and ability to do their jobs or works. As a result, managers or superiors do not want to delegate rights to their subordinates.
   
   
5. Distorted delegation:
   Managers may assign full responsibility but delegate inadequate authority to discharge these responsibilities. In such a situation, it is difficult to perform the task.
   
   
6. Improper reward system:
   The delegation of authority means taking additional responsibility. If the organization has an improper reward system then the subordinate does not want to take additional responsibility. As a result, the delegation of authority may be obstructed.
   
   
7. Lack of control:
   If the organization has an ineffective control system then the manager or superior does not want to delegate the rights and power to their subordinates because of the fear of misuse.

Concept of Decentralization

Decentralization is the process of equal distribution of decision-making power to the operating level of staff for better performance. This philosophy emphasizes that the top level of management should keep minimum right and power and all decision-making powers are to be provided to the operating level of staff, manager or superior. It is optional and suitable for the research-oriented and creative jobs where the employees are disciplined, skilled and trained.

According to Louise A. Allen,” Decentralization is the systematic and consistent delegation of authority to the level where the work is performed.”

Similarly in the word of Dale S. Beach,” Decentralization means placing the authority and decision-making power as close as possible to the level at which the work is done.”

In conclusion, we can say that the decentralization of authority is the process of systematic and scientific delegation of authority to the operating level of staff for better performance.

Needs for Decentralization

1. Motivation:
   The subordinates or managers receive rights, powers, prestige, and status through this decentralization of authority. They feel a greater opportunity for leadership and participation in the organization. This may lead to an increase in their morale and it may motivate them more and more to work honestly.
   
   
2. Environmental adaptation:
   Decentralization helps an organization to adapt to the fast-changing environment because the subordinate’s personal thinking is also given due priority.
   
   
3. Permits quicker and better decisions:
   The superior, who is close to the work, are most knowledgeable about the specific details and circumstances of problems that arise in their respective department or work units. Due to the decentralization of authority, they are involved in decision making and appropriate decisions are taken by the managers very quickly.
   
   
4. Reduce the burden of the top executive:
   Decentralization is the distribution of power and authority. It relieves top executives from routine and day-to-day time-consuming works and helps them to devote greater attention to other important organizational issues such as planning, policymaking, strategy formulation, and decision making.
   
   
5. Facilitate diversification:
   Decentralization facilitates the diversification of products, activities, and markets. Alfred D. Chandler opines that it is the decentralization of authority which contributed a lot to the large American enterprises such as DuPont, General Motors, Standard Oil and Sears Roebuck, which were initially very small and had a centralized organizational structure.
   
   
6. Management development:
   Decentralization encourages managers to exercise freedom in decision making. They learn to exercise judgment. This develops managerial competency. This also promotes innovation and creativity.
   
   
7. Improved teamwork:
   Both managers and employees share the decision-making authority which integrates the employees as one team and develops team spirit among them.
   
   
8. Effective supervision and control:
   It is said and accepted in many cases and circumstance that greater the degree of decentralization, the more effective is the supervision and control. Supervision and control can be made effective by evaluating the performance of each unit, plant, department or branch office in the light of predetermined standards.

 

Factors Affecting Decentralization of Authority

The decentralization of authority is a blessing to organizational success. While designing or determining the organization structure, one should be clear about the degree of concentration and dispersion of authority in the organization i.e. centralization and decentralization of authority. While determining decentralization of authority, the following factors should be considered as they affect much in determining the amount of decentralization appropriate for an organization:

1. Nature of decision:
   Organizational decisions are broadly classified into two types i.e. repetitive and non-repetitive. If the decisions are repetitive in nature, then the rights and power are to be centralized. If the decisions are not- repetitive or unique in nature then the rights and power are to be decentralized.
   
   
2. Philosophy of management:
   Some managers have low self-confidence, conservative attitude, and traditional faith. Such types of managers centralize the rights and power but some managers have the modern concept and consider the democratic system. Such type of manager decentralizes rights and power.
   
   
3. Organization history:
   Decentralization depends upon the organization's history that how it was organized and grew. If the organization is established or grown-up by a large number of people or reputed person then the rights and powers are to be decentralized. If the organization is established by a small group of people then the rights and power are to be centralized.
   
   
4. The size of the organization:
   It is observed that the speed and adequacy of decision making, flexibility, and efficiency are enhanced through decentralized operations in the case of a very large, multi-product diverse and complex organization. Thus, the larger the size of an organization, the larger will be the decentralization of authority. Smaller the size of an organization, the smaller will be the decentralization of authority.
   
   
5. The cost of decentralization:
   If the cost of decentralization is high, then the manager or superior centralizes the rights and power. If the cost of decentralization is minimum or low then the right and power are to be decentralized.
   
   
6. Control technique:
   If the organization has an effective control system then the manager or superior decentralize the rights and power because subordinately is self-controlled. If the organization has an ineffective control system, then the manager or superior centralizes the rights and power.
   
   
7. Competencies of a subordinate:
   If more competent and experienced personnel are available at a lower level, the organizations can adopt and implement a policy of decentralization. Without having competent personnel without facilitating efficient training and management development programs to the staff members, the decentralization process cannot be followed.

Differences between delegation and decentralization of authority

Basis	Delegation of authority	Decentralization of authority
Meaning	It is the process of assigning work to subordinates and giving the necessary authority to do the given jobs effectively.	It is the process of equal distribution of decision-making power to the operating level staff for better performance.
Essence	Delegation is an essential organizational structure.	Decentralization is optional i.e. the top management may or may not decentralize authority.
Nature	It is a primary concept which involves in developing organizational structure.	It is the secondary concept and also ends the result of the delegation process.
Relationship	It shows a relationship between a superior and subordinates in the management hierarchy.	It shows the relationship between top-level management and various departments of the enterprise.
Responsibility	Superior delegates or transfers some rights and duties to a subordinate but his responsibility in respect of that work does not end.	Sub-ordinates become liable for the work.
Liberty of work	Sub-ordinates do not have full liberty.	A substantial amount of freedom is there.
Control	Here, superior exercises total control over a subordinate.	Here, superior exercise general control over a subordinate.
Purpose	Its purpose is to reduce the workload of authority.	Its purpose is to encourage employees to participate.