Decentralization of authority means distributing decision-making power away from a central authority to lower levels in an organization. Instead of having all decisions made by top management, employees at various levels can make decisions relevant to their roles. Example: In a retail company, instead of the CEO deciding every product to stock, store managers can choose products based on local customer preferences. This allows the store to better cater to its customers. Decentralization of authority helps organizations be more flexible and responsive. By allowing employees at different levels to make decisions, organizations can improve efficiency, foster innovation, and enhance employee satisfaction. Characteristics Empowerment: Employees are given more responsibility and the authority to make decisions. This makes them feel valued and trusted. Faster Decision-Making: When decisions are made at lower levels, they can often be made more quickly because they don’t have to go through many layers of management for approval. Better Adaptability: Local managers or teams can respond to changes in their specific area or market without waiting for directions from the top. Increased Innovation: Employees who are empowered to make decisions may come up with new ideas and solutions, leading to greater creativity and innovation.

Improved Job Satisfaction: Giving employees a say in decisions related to their work can lead to higher job satisfaction and morale.