Question

Benoy opens a retail store in a local market. He knows it will be impossible for him to handle all work alone so he appoints Naina to perform routine tasks on his behalf thereby reducing his workload. As a result of this decision Benoy is left with more time to concentrate on important matters. Besides he also recruits ten other persons as support staff. Five years later, as his business earns a good name for itself he opens another outlet in the city. Considering Naina's competence he selectively dispersed his authority at all levels and gave Naina the independent charge of running that outlet.

1. Identify the two concepts which reflects the transition in the role of Naina in the above paragraph.
2. Briefly explain the identified concepts in part (a).
3. Give any three differences between the two concepts as identified in part (a) of the question.
4. Discuss any two benefits which Benoy could derive by appointing Naina.

Answer 1

a. Delegation of Authority and Decentralisation

b. Delegation of Authority: For instance, the production manager has the power to choose the amount and calibre of output, buy supplies and equipment, and so forth. Without such power, one is unable to perform their appointed duties. Therefore, one of the most important steps in the organising process is the delegation of authority.
Decentralisation: Decentralisation of authority refers to the methodical distribution of power across all departments and management levels so that decisions and actions are taken appropriately at each level.

c. 

Basis	Delegation	Decentralisation
1. Nature	Delegation is a compulsory act as no manager can perform all tasks on his own	Decentralisation is an optional policy-decision at the discretion of the top management
2. Purpose	To reduce the burden of the manager	To increase the role and autonomy of lower level managers
3. Scope	Its scope is narrow as it is confined to a superior and his immediate subordinate	Its scope is wide as it involves extension of delegation to the lowest level of management
4. Status	It is a process of sharing tasks and authority	It is the result of the policy decision taken by the top management
5. Freedom of action	There is less freedom to take decisions due to more control by the superior	There is more freedom of action due to Jess control by the top management

d. Benefits of Delegation of Authority:

1. Relief to Top Executives: A manager can share his workload with his subordinates through delegation of authority. Senior executives have less work to do as a result. A management can focus on crucial policy issues by delegating ordinary tasks to subordinates. As a result, he can better utilise his precious time and skills. Better outcomes can be obtained by the management who delegated authority than by the one who did not.
2. Executive Development: By exerting authority, delegation allows staff members to develop their leadership and decision-making abilities. Because they must deal with situations and resolve managerial issues, it helps to raise the calibre of employees at lower levels. Over time, they gain proficiency and experience, enabling them to assume increasingly challenging roles. Delegating authority is a strategy for training future managers in this way.