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

Which statement correctly distinguishes delegation from decentralisation?

Delegation is an individual act in which a superior assigns authority to a subordinate, whereas decentralisation is a deliberate organisation-wide policy of systematically dispersing decision-making authority to lower levels. The two are therefore not identical, and the reverse description is incorrect.

  1. ADelegation is a systematic organisation-wide policy, while decentralisation is an individual act between a superior and a subordinate
  2. BDelegation is an act between a superior and subordinate, while decentralisation is a policy of systematically dispersing authority across the organisationCorrect
  3. CBoth are identical, as each means complete transfer of ultimate responsibility
  4. DDelegation applies only to top management, decentralisation only to workers

Explanation

Delegation is a process by which a manager assigns authority to a subordinate for particular tasks, and the manager remains answerable. Decentralisation is a deliberate, organisation-wide policy of pushing decision authority down. The first option reverses the two ideas.

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