Article On Decentrilization

Article Review

Decentralization Decentralization is the process of delegating decision-making authority down to the lower levels in an organization, relatively away from and lower in a central authority. A decentralized organization shows less hierarchy in the organizational structure, wider span of control, and a bottom-to-top flow of decision-making and flow of ideas.

Decentralization and centralization are themes that have played major roles in the history of many societies. An excellent example is the gradual political and organizational changes that have occurred in European history. During the rise and fall of the Roman Empire, Europe went through major centralization and decentralization. Although the leaders of the Roman Empire created a European infrastructure, the fall of the Empire left Europe without a strong political system or military protection.

The author quoted decentralized hierarchy of East India Company, as there was a lack of communication means. In a centralized organization, the decisions are made by top executives or on the basis of pre-set policies. However decentralization process is still in operation not even in private sector but in government too. In 20th century centralization become more dominant in private sector especially in banks. The writer pointed out both theories as equal importance because now a days most of governments are in competition to decentralized most of its department. Decentralization is most effective in organizations where subunits are autonomous and costs and profits can be independently measured. The benefits of decentralization include decisions made by those who have the most knowledge about local conditions. Decision-making has a desirable motivational effect; and managers have more control over results.

In context of decentralization in Pakistan be implemented with the partial funding support of Asian Development Bank, to carry forward reforms in the areas of decentralization, fiscal restructuring and local governance. It is an innovative, demand-driven and output oriented program. Under the old system of government, the provinces administered the districts directly through the bureaucracy. This old system of administration lacked democracy and accountability at the local level. Governance was centralized so that decisions about local level planning and development were taken higher up, with little reference to local needs and priorities. Because civil servants were not answerable to the public, there was little incentive for them to ensure high quality service delivery.

In a more decentralized organization, the top executives delegate much of their decision-making authority to lower tiers of the organizational structure. The wider spans of control also reduce the number of tiers within the organization, giving its structure a flat appearance. One advantage of this structure, if the correct controls are in place, will be the bottom-to-top flow of information, allowing all decisions among any official of the organization to be well informed about lower tier operations. For example, an experienced technician at the lowest tier of an organization might know how to increase the efficiency of the production, the bottom-to-top flow of information can allow for this knowledge to pass up to the executive officers. At end we can conclude that decentralization and centralization have a parallel importance and it varies from organization to organization even among states.