Relation between Delegation & Decentralization
Decentralization is extension of delegation. In delegation we multiply the authority with two whereas in decentralization the authority is multiplied by many because systematic delegation talking place at every level will result in evenly distribution of authority and responsibility at every level and result in decentralization. If delegation is restricted to certain levels only then there will be on complete decentralization also. For example, if the directors give the responsibility to production head to complete the target of 50,000 units per annum and authorize him to hire the required workers, decide their salaries and working conditions.
The production head further shares his responsibility and authority with the production manager to achieve the target and select the workers. The production manager shares his authority and responsibility with the supervisors who directly deal with the workers and authorize them to select the workers. This sharing of authority and responsibility between directors and production head, managers and subordinates will result in systematic distribution of authority at every level automatically. That is why we say systematic delegation leads to decentralization. In delegation the authority is shared between two persons only i.e., manager and subordinate whereas in decentralization many people at every level are involved i.e. directors, production head, manager, subordinates etc.