Here is a compilation of term papers on ‘Decentralisation of Authority’ for class 11 and 12. Find paragraphs, long and short term papers on ‘Decentralisation of Authority‘ especially written for school and college students.

Decentralisation of Authority

Term Paper Contents:

  1. Term Paper on the Meaning of Decentralisation
  2. Term Paper on the Causes of Decentralisation
  3. Term Paper on the Degree of Decentralisation
  4. Term Paper on the Advantages of Decentralisation
  5. Term Paper on the Disadvantages of Decentralisation
  6. Term Paper on How to make Decentralisation Effective?

Term Paper # 1. Meaning of Decentralisation:

This is the delegation of power and authority from higher to the lower levels of the organisation. This results often in the creation of small self- contained organisational units. The concept of decentralisation refers to the extent to which authority and accountability have been passed down to the lower levels.


This terminology derives from a perspective of the organisation as a series of concentric circles. The chief executive of the organisation is situated in the very center and a “web” of authority radiates from him. The greater the amount of authority delegated throughout the organisation, the more decentralised the organisation is.

Koontz and O’Donnell are of the opinion that “decentralisation of authority is a fundamental phase of delegation.” Louis. A. Allen observes that decentralisation is a systematic effort to delegate authority to the lower layers of the organisation. He further states that it is “concerned with placement of authority with references to responsibility.”

Newman, Summer and Warren states that decentralisation “is simply a matter of dividing up the managerial work and assigning specific duties to the various executive skills.”

So this refers to the sum total of all rights and powers to make decisions, make provision for staff to spend money, to hire labour etc.; due to delegation of authority to do specified work. This is both a philosophy of management and technique. As a philosophy, it means the belief of the top management that all employees should have the maximum opportunity to develop and be given necessary support so that they will make use of their talent to the maximum in the interest of the organisation.


As a technique, it is a way of organising which distributes authority to semi-independent decision units. The object of creating such units is to achieve mutual goals. It promotes and increases the number of centres of initiative. It is the distribution of authority throughout the organisation.

Effective decentralisation requires a proper balance between disposal of authority among lower levels and adequate control over them. It is not the same thing as delegation as it is something more than delegation. Decentralisation is quite distinct from dispersion. Dispersion occurs when plants and offices are located at different places. Decentralisation can take place even without dispersion. So decentralisation refers to the systematic delegation of authority throughout the organisation.

Term Paper # 2. Causes of Decentralisation:

The important factors that cause decentralisation of authority are:

(a) Decentralisation is needed when the various levels of management connected with performance are to take quick and appropriate decision on the spot at a level at which it is really required with a view to cash on the opportunity present.


(b) Decentralisation is needed when the top management wants to reduce communication work.

(c) Decentralisation may be necessitated either by market condition or a product which requires a special emphasis on decision making. Further technological changes may also create conditions favourable to decentralisation.

(d) Decentralisation may be necessitated by growth and diversification of activities by an organisation. Moreover, this may be introduced with the object of introducing flexibility in operation, facilitate good direction and to relieve top executive from extra work.

(e) Finally, physical dispersion of activities of the organisation may require decentralisation of authority for better results.

Term Paper # 3. Degree of Decentralisation:


The degree of decentralisation varies according to the size of the firm, prospects of future growth, expanse of the market, the need for diversified policies, manager’s desire for independence, availability of managerial staff etc. Decentralisation presupposes departmentalised structure on functional basis.

In determining the degree of decentralisation the factors normally to be considered are:

a) Environmental influences like market characteristics, competitive pressures and availability of materials.

b) The organisation’s size and growth rate and


c) Other characteristics of the organisation like costliness of giving decisions, top management preferences, the organisation’s culture, and abilities of lower level managers.

Allen has given three criteria to judge the degree of decentralisation.

They are:

(a) What kind of authority is delegated?


(b) How far down the organisation is it delegated?

(c) How consistently is it delegated?

These three criteria may be applied to know the degree of decentralisation in different areas like appointment of employees, promotion of employees, acquisition of capital equipment, approval of travel expenses, procurement of raw materials etc.

Earnest Dale has given four tests to know the degree of decentralisation in an organisation.


The degree of decentralisation of authority is greater when:

(a) The number of decisions made lower down the management hierarchy is greater.

(b) The more important decisions are made lower down the management hierarchy e.g. capital expenditure decision taken by the plant manager without sanction or approval.

(c) More functions are affected by decisions made at lower levels.

(d) Decentralisation is greater when no check at all is made on decisions taken at lower levels. The fewer the people to be consulted, and the lower they are on managerial hierarchy, the greater the degree of decentralisation.

Term Paper # 4. Advantages of Decentralisation:

Decentralisation is the prevailing philosophy for organising activities on the part of large organisation. Experiences show that many organisations which adopted centralisation at some point of time were forced to switch over to decentralisation as centralisation failed to cope up with the situation.


The main advantages of decentralisation are:

(i) Reduces the Burden of the Chief Executive:

In centralisation most of the authority is rested with top executive. In decentralisation is reduced the burden of the chief executive as he delegates a major part of his authority to his subordinates and this will enable him to devote more on vital issues rather than on routine matters.

(ii) Quick Decisions:

In decentralisation, the responsibility for decision making is near the place where actions take place. Those who are close to the work situation can make quick and accurate decisions as they are well aware of realities of the situation. This also minimises the delay in transmitting information from and to the workplace.

(iii) Diversification of Activities:


When diversification of product lines take place organisation may complex and poses a challenge to the top management regarding control and co-ordination. This can be met effectively by the top management.

(iv) Development of Managerial Personnel:

Decentralisation provides opportunities for personnel to decide on various issues and to manage various situations. This facilitates the organisation to develop the prospective managerial personnel.

(v) Effective Control and Supervision:

The greater the degree of decentralisation, the more effective becomes the span of control. This leads to effective supervision as managers at the lower levels have complete authority to make changes in work assignment, to change production schedules, to recommend promotions and to take disciplinary actions.

(vi) Effective Co-Ordination:


Decentralisation creates various levels at different places of the organisation. The top management is to co-ordinate their activities and makes their approach more effective and purposeful.

(vii) Improves Motivation and Morale:

Decentralisation results in providing power, independence and status to employees. This gives the executives an opportunity to take initiative and to try new ideas. This high tens the morale and improves motivation of employees. This leads to fostering team spirit and group cohesiveness among the subordinates.

(viii) Miscellaneous Economies:

Decentralisation facilitates in achieving internal and external economies. Internal economies include speedier com­munication, better utilisation of manpower at middle and lower levels, greater incentive to work and greater opportunities for training. External economies like reduction of cost of production are achieved.

Term Paper # 5. Disadvantages of Decentralisation:

Decentralisation is suitable for a large organisation with multiple products operating in different geographical locations. Further in the case of organisations growing rapidly and working in a dynamic environment decentralisation is best suited to achieve the best results.


But decentralisation poses lot of problems. They are:

(i) Decentralisation increases administrative cost as it requires the employment of trained personnel to accept authority. The services of highly paid personnel may not but fully utilised in all organisation. There may be duplication of functions and under-utilisation of facilities.

(ii) Decentralisation of authority may create problems in bringing co­ordination among the various units.

(iii) Decentralisation may bring about inconsistencies in the company. They may not follow uniform procedures in various divisions.

(iv) The executives at the lower level may develop a narrow outlook as their main focus is only their divisions or units. This outlook may be detrimental to the over-all interest of the organisation.

(v) Proper handling of emergency situations in a decentralised set up may be difficult due to changing conditions. Many external factors like market uncertainties, Trade Union movement, government intervention may pose problems and make decentralisation a difficult proposition to meet.

Term Paper # 6. How to make Decentralisation Effective?


To make decentralisation effective the organisation has to take the following measures:

(i) Appropriate Centralization:

Apparently this sounds contradictory. By appropriate centralisation it means the formulation of policies and procedures for the entire organisation. This can be achieved close co-ordination and control over the various operating units.

The centralised control is needed in some basic areas to help the top management in knowing the real happenings in the organisation. The control is related with overall performance of a unit rather than interference in day to day functioning of a unit. Day to day functioning is to be controlled by the unit manager. Each unit is to enjoy autonomy within the framework of overall policy.

(ii) Development of Managers:

In every organisation better quality managers are always needed to achieve better results. It is also true that good managers can produce good results when their potentials and abilities are better utilised.

The success of decentralisation depends on the availability of quality managers in the organisation who can handle situations effectively and efficiently. So the organisation is to develop better quality managers from within the organisation rather than recruiting them from outside. They should be developed within the organisation itself, by delegating authority and responsibilities and allowing to learn through experience in making decisions.

(iii) Competition among Units:

In a decentralised organisation there will be number of units. It is the duty of the top management to develop healthy competition among them. To evaluate performance standards may be set for various units. The evaluation is to be made objectively and independently. Suitable incentive package may be adopted to reward highly efficient units. This will promote healthy completion between units.

(iv) Open Communication:

The communication system must be proper, two-way and transparent. This is needed for proper interaction between the superior and the subordinates within the organisation. The superior is to convey the policies, procedures to be adopted by the subordinates. Necessary advice and guidance should be given to subordinates from time to time. Similarly the subordinates are to report to superiors about performance for evaluation.

(v) Effective Co-Ordination:

Co-ordination means integrated functioning of all units. This can be achieved in the normal situation. In emergencies when resources become scarce the units may develop a sense of unhealthy competition and try to grab sizeable resources. This will lead to fragmentation of the units. To secure co-ordination the top management is to use committees, liaison officers and other mechanisms.