Principles of Hotel Management

D
ECENTRALISED
A
DMINISTRATION
Decentralisation is the opposite of centralisation. It refers
to a situation in which authority to make decisions is assigned
at the point where operations take place.
According to McFarland, “Decentralisation is the degree to
which an organisation places authority and responsibility for
decisions as far down in the organisation as efficient management
permits,”
According to Henri Fayol, “Everything that goes to increase
the importance of the subordinates role is decentralisation.”
In the words of Allen, “Decentralisation implies consistent
and systematic effort to delegate to the lowest levels of all
authority except that which can only be exercised at central
points.”

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Management Dimensions
367
In the words of Gray and Smeltzer, “Decentralisation refers
to the extent to which managerial authority is delegated or
pushed downward in an organisation.”
Thus, decentralisation of authority refers to the extent to
which decision-making authority is widely dispersed within the
organisation. In a decentralised organisation, top management
retains authority to make certain important decisions such as
setting overall objectives, strategic planning, policy formulation
etc. and delegates the authority to make operating decisions at
the points as near as possible where actions take place.
Characteristics
1. Decentralisation authority refers to the extent to which
dispersal of decision-making authority within an
organisation is made.
2. In decentralisation, authority to make operating and
routine decisions is delegated at the points Where
operations or actions take place.
3. In a decentralised organisation, decision-making power
relating to functional areas are delegated to middle and
lower-level managers whereas top managers retain
authority to make decisions relating to setting corporate
objectives, formulating policies etc.
4. In a decentralised organisation, managers at middle
and lower levels have discretion in specific operational
areas.
5. Decentralisation is more than mere delegation of
authority. Delegation of authority means assigning
authority from one person to another. On the other
hand, decentralisation means dispersal of authority
throughout the organisation. Under decentralisation, top
managers exercise minimum control whereas under
delegation control remains with top managers.
6. Decentralisation of authority differs from decentralisation

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Principles of Hotel Management
or dispersal of physical facilities. Decentralisation of
physical facilities means dispersal of geographical
location of factories or offices. On the other hand,
decentralisation of authority means dispersal of decision-
making authority within the organisation.
7. It is impossible to achieve absolute decentralisation of
authority.