Difference between Delegation and Decentralization

Delegation and Decentralization are two terms which are mostly misunderstood as the same. Delegation of authority means assigning work to subordinates and giving them authority to do it. However, Decentralization means the dispersal of authority throughout the organisation.

What is Delegation?

Delegation of authority means assigning work to subordinates and giving them authority to do it. Delegation takes place when a superior grants some discretion to a subordinate. The subordinate must act within the limits prescribed by the superior. Delegation enables managers to distribute the workload to others. By reducing the workload for routine matters, they can concentrate on more important work. It helps to improve the job satisfaction, motivation and morale of subordinates. It satisfies their needs for recognition, responsibility and freedom.  

What is Decentralization?

Decentralization means the dispersal of authority throughout the organisation. It refers to a systematic effort to delegate to the lowest levels all authority except which can be exercised at central points. It is the distribution of authority throughout the organisation. In a decentralised organisation, the authority of major decisions is vested with the top management and balance authority is delegated to the middle and lower levels.

Difference between Delegation and Decentralization:

Basis	Delegation	Decentralization
Meaning	Delegation of authority means assigning work to subordinates and giving them authority to do it.	Decentralization refers to a systematic effort to delegate to the lowest levels all authority except which can be exercised at central points.
Freedom of action	As control is in the hands of superior, less freedom is given to subordinates.	More freedom is given to subordinates to take decisions.
Status	This process is done as a result of division of work.	This is the result of policy decision of top level.
Scope	It has narrow scope as it is limited to the superior and his subordinate.	It has wide scope as it is extended to the lowest level of management.
Aim	It aims to reduce workload of superior.	It aims to enhance the role of subordinates in the organisation.
Nature	It is a necessary act because no individual can perform all tasks on his own.	It is an optional policy decision and is done at the discretion of top management.
Responsibility	It is responsibility of every manager.	It is the responsibility of top level management.
Authority	The maximum authority is retained at top level.	Authority is systematically distributed at every level.

Decentralization is much more than delegation. In delegation, there is a transfer of authority from one individual to another. But in Decentralization, there is diffusion of authority throughout the organisation.