3. Highly differentiated product lines: where the product lines in a company are very different the
extreme case being of industrial and consumer products both existing in the same company -
decentralisation or divisionalisation becomes very important.
4. Availability of Managerial Manpower: Decentralisation of authority requires the availability of
competent managers. The organisation must provide adequate training and development facilities
for managers and decentralisation is one of the good methods of encouraging such development. A
large firm can even decentralise with the objective of developing managers.
5. Top level Management Philosophy: A subordinate generally copies his boss. Thus the whole
organisation is often moulded round the character of the top management. The management
philosophy of top management determines to a large extent how much the several managers in the
organisation are willing to retain authority or delegate it down the line.
6. Environmental influences: The contingency theory of organisation stresses that an organisation’s
structure and functioning are dependent on its interface with the external environment. The external
factors relate to dealing with labour unions, community officials, lobbying in the government or matters
relating to defence contracts etc. These factors necessitate centralisation.
15.14 SUMMARY Delegation is an administrative process of getting things done by others by giving them responsibility.
All important decisions are taken at top level by Board of Directors. The exectuion is entrusted to
Chief Executive. The chief executive assigns the work to deparmtental managers who in turn delegate
the authority to their subordinates. Further, decentralisation of authority as a position where the
ultimate authority to command or control as well as the ultimate responsibility for results in placed as
far down in the organisation. Thus delegation and decentralisation are related concepts.
