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CMA Foundation · Fundamentals of Business Economics and Management · Organisation Structure, Responsibility, Accountability and Delegation of Authority

Which statement about delegation versus decentralisation is correct?

Decentralisation is a systematic policy of dispersing decision-making authority across all levels of the organisation, whereas delegation is the process of a particular superior assigning authority to a particular subordinate. The two are related but not the same.

  1. ADelegation is a systematic, organisation-wide policy while decentralisation is an individual act between a manager and subordinate
  2. BDelegation is compulsory for every manager while decentralisation is optional
  3. CDecentralisation is the systematic dispersal of decision-making authority throughout the organisation, while delegation is a process between a superior and subordinateCorrect
  4. DBoth terms mean the same and apply only to top management

Explanation

Delegation is an act between a superior and a subordinate, while decentralisation is a deliberate organisation-wide policy of spreading decision power at all levels. Option A reverses these meanings, and the others are incorrect generalisations.

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