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WHAT IS DECENTRALISATION?
Decentralisation means diffusion of authority. The dispersal of authority of decision-making to the lower level management is termed as decentralisation. Decentralisation of authority is a fundamental phase of delegation and the extent to which authority is not delegated is called centralisation. According to Fayol "Everything that goes to increase the importance of the subordinate's role is called decentralisation."

Decentralisation in relation to office denotes disperse of office services and activities. The necessity of decentralisation of office services occurs when official activities are performed at functional departmental level. Thus, decentralisation in relation to office may include departmentation of activities. When authority is dispersed, decentralisation is present.

The need for decentralisation is felt when the business grows in its size which necessiates diversification of office activities. Decentralisation occurs at the time of decisions of routine nature but if decisions are vital, the authority is not decentralised. The technological development, political factors, availability of managers also affects the degree of decentralisation. Decentralisation does not exist in its pure sense. There is a mixture of the two because some activities are centralised and some are decentralized.


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