Question

Disbursing organizational authority for decision-making throughout an organized structure is called what?

• A. Centralization
• B. Decentralization
• C. Delegation
• D. Coordination

Hint:

Difference between key authority concepts:

• \textbf{Centralization} → Authority concentrated at top level
• \textbf{Decentralization} → Authority distributed throughout organization
• \textbf{Delegation} → Transfer of authority from superior to subordinate

Memory trick: \[ \textbf{Decentralization = Decision power distributed across the organization} \]

Answer 1

The Correct Option is B

Concept:
In management, the distribution of authority within an organization determines how decisions are made and who has the power to make them. Two important concepts related to this are centralization and decentralization. Decentralization refers to the systematic delegation and distribution of decision-making authority to lower levels of management within an organization. Instead of concentrating all authority at the top level, decentralization allows managers at different levels to participate in decision-making. This approach improves efficiency, encourages initiative among employees, and enhances organizational flexibility. Key features of decentralization include:

• Distribution of authority across different levels of management
• Faster decision-making due to reduced dependence on top management
• Increased managerial development and motivation
• Greater organizational responsiveness to changes

Step 1: Understanding the question.

The question refers to the distribution of authority for decision-making throughout an organization.
Step 2: Identify the management concept involved.

When authority is spread across different levels of the organizational hierarchy, it is known as decentralization.
Step 3: Analyzing the options.

• Option (A): Centralization — Concentration of authority at the top level of management.
• Option (B): Decentralization — Distribution of decision-making authority throughout the organizational structure. This matches the description in the question.
• Option (C): Delegation — Assigning specific tasks and authority from a superior to a subordinate.
• Option (D): Coordination — Integrating and harmonizing different organizational activities.

Step 4: Selecting the correct answer.
\[ \boxed{\text{Decentralization}} \]