According to Franklin G Miller “department is a work group performances certain word. It is a division, branch, or area under the direction of man”. Departmentalization is a process of dividing the whole of enterprise into groups and sub-groups. But decentralization refers to a decision on authority so as to diffuse the authority in a manner in which it is helpful in effective operation of the activities of the enterprise.
Delegation on the other hand refers to conferring of authority on other to help him accomplish his assigned task satisfactory. It may mean
- Assigning of work, and
- Giving of an authority to accomplish the assigned takes
Form the above it is clear that the three terms which seems to be identical are not the same in technical sense. Departmentation is a process of grouping and sub-grouping. This is the first task and does not directly relate either to decentralization or to delegation. Decentralization, however, is a diffusion of authority within the entire enterprise and also within a department. It relates to positions characterized by organization for better management. How far they are contracted, making them depended tor a decision on their superiors.
Decentralization is a decision in system of authority to be exercised. This makes it clearly distinct from departmentation. Delegation, on the other hand, follows decentralization. Delegation helps in decentralization and so it is the care vice-versa. Both are interdepend and interrelated. Delegation is conferment of authority to a position on the basis of decentralized departmentation. Delegation is, therefore, a cause while decentralization is the effect. Everything that increases the importance of lower level of worker is decentralization. This makes the scope of delegation limited and that of decantation wider.
If the Chief Executive empowers his immediate subordinate or personnel manager to independently appoint those whose salary does not exceed Rs. 10,000/- per annum then this action of the Chief Executive will be called delegation. On the contrary if this authority is conferred by him on all the departmental heads then it will come under the category of decentralization of authority. But when the chief executive organizes the enterprise cy dividing it, say into five wings namely production, sale, purchase and store, finance and accounts and administrative wings this action will be classed as departmentation.
To sum up the difference, Departmentation is thus a process of making divisions while decentralization is diffusing of authority and delegation is the use of authority to confer on others the necessary to do an assigned work.