Factors affective decentralizations of authority

Decentralization of authority is a management philosophy. It is systematic distribution f authority to the lower level of organizations. Decentralization decision is taken by the top level management. However, it is not an easy task to determine how much authority should be decentralized or centralized. There are certain factors which determine the decentralization decision in an organization. Some common factors affect decentralization decisions are as follows

1)     Attitude of top level management

The attitude of the top management affects the amount of decentralization's. If top managers have positive attitude and are ready to delegate their power to the lower levels, greater degree of decentralization may be found is such an organization. Generally, owner-managed organization to be more centralization than the professionally managed once.

2)     History of the organization

The history of the organization also affects the decentralization process. If run enterprise has growth up from a small group of person, there is a tendency to centralize authority, but growth of the organization through mergers and acquisitions facilities decentralization.

3)     Size of organization

The size of organization largely affects the extent of decentralization. The large the size of organization, more delegation of authority is required. Thus, large size organizations are more desirable for decentralization than the small once.

4)     Capacity of manager

The ability of manager also affects the decentralization process. If the competent managers are available at lower levels, the organization can move towards decentralization

5)     Nature of activity

Technological changes make the jobs more complex that require decentralization. Generally, basic function like production and distribution are more decentralized than staff function like personnel, research and development, etc.

6)     Organizational strategy and environment

The strategy and environment of an organization influence the market position and its competitive strength. These factors, in turn, affect the degree of decentralization of organization.