'Decision making authority is shared with lower levels and is consequently placed nearest to the points of action'.

Which of the following concept is highlighted in the above statement?

Decentralisation

The correct answer is option 2- decentralisation.

Decentralisation is highlighted in the given statement.

Decentralisation explains the manner in which decision making responsibilities are divided among hierarchical levels. Put simply, decentralisation refers to delegation of authority throughout all the levels of the organisation. Decision making authority is shared with lower levels and is consequently placed nearest to the points of action. In other words decision making authority is pushed down the chain of command.

OTHER OPTIONS

• Delegation- Delegation refers to the downward transfer of authority from a superior to a subordinate. It is a pre-requisite to the efficient functioning of an organisation because it enables a manager to use his time on high priority activities. It also satisfies the subordinate’s need for recognition and provides them with opportunities to develop and exercise initiative.

• Coordination- Coordination involves synchronisation of the different actions or efforts of the various units of an organisation. Coordination unifies unrelated or diverse interests into purposeful work activity. It gives a common focus to group effort to ensure that performance is as it was planned and scheduled.

• Centralisation- An organisation is centralised when decision-making authority is retained by higher management levels. Complete centralisation would imply concentration of all decision making functions at the apex of the management hierarchy. Such a scenario would obviate the need for a management hierarchy.