Read the following passage and answer the following questions.
Progress Ltd. which deals in stationery has been registered with a share capital of ₹1,000 crores in New Delhi. The company has a manufacturing unit in Madhya Pradesh and a marketing department in Nashik. The company divided its activities into different departments. The company assigned duties and powers without creating formal authority-responsibility relationship. The entire business started working on gossip and based on personal relations.
Progress Ltd. now plans to let managers at all levels of its manufacturing unit in Madhya Pradesh and its marketing department in Nashik take decisions on the spot, without referring them to the top management. Which concept will the company be following?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Decentralisation
Option (1) Delegation — Incorrect. Delegation is the transfer of authority from a superior to his immediate subordinate. Progress Ltd. is giving decision power to managers at all levels, which goes beyond one superior and one subordinate.
Option (2) Centralisation — Incorrect. In centralisation, decision making authority stays with the top management. Progress Ltd. is doing the opposite.
Option (3) Decentralisation — Correct. Decentralisation means delegation of authority throughout all the levels of the organisation. Decisions are placed nearest to the points of action. Managers at all levels deciding on the spot, without asking the top, is just this.
Option (4) Departmentalisation — Incorrect. Departmentalisation is the grouping of activities into departments. The unit and the department already exist; the change is about who takes decisions.
NCERT (2026-27 Edition):
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