decentralization

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decentralization

the relocation of managerial AUTHORITY and RESPONSIBILITY to a lower level in the ORGANIZATION. A restructuring of a FUNCTIONAL STRUCTURE to a PRODUCT-BASED STRUCTURE will generally involve some degree of decentralization, especially regarding operational (but not strategic) matters. DELAYERING often involves decentralization from middle management to LINE MANAGERS. See CENTRALIZATION, ORGANIZATIONAL ANALYSIS.

decentralization

the diffusion of economic decision-making to many different decision-makers rather than concentrating such decision-making centrally. In an economy this is achieved by the adoption of the PRICE SYSTEM, which devolves decisions to individual consumers and suppliers. In a firm, decentralization involves delegating authority to make decisions ‘down the line’ to particular divisions and departments. See PRIVATE ENTERPRISE ECONOMY, MFORM ORGANIZATION.
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