Decentralization of Managerial Authority Page: 98
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decentralised authority giMnsto the principle of democratic
Another faotor that determine a whether managerial authority
will be centralised or decentralised la tha competence of
managers to raealvt do legs ted authority. Programs for selecting
new potential managejsent material and seIf-devalopment of
present manageriel personnel nay be dealreble before any attempt
la aade to decentralise. ;V':
There are several external conditions that amy Influence
a corporation*s plans to decentralise managerial authority,
fee governments restrictive tax lava usually require'«#n«*
trallsed authority over financial matters* Economic conditions
auch as depressions tend to cause a reeeiifcrallzatlstt ©f de*
centralised authority while periods of prosperity are followed
with greater decentralisation. Where competition is very keen
and profit margins are snail* managerial authority is likely
to he centralised over sales activities.
As corporation headquarters relinquish more and.more
authority, they change from operations of directing activities
to those of coordinating then. One of the noet affective
controls over decentralised authority la requiring units to
ehow a profit. Managerial decentralisation achieved through
proflta control Is superior to other alternative devisee ueed
for maintaining control.
The Importance of the human factor and ita relationship
to de centralis lng authority cannot be stressed too greatly.
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Kirkpatrick, Thomas O. Decentralization of Managerial Authority, thesis, 1958; Denton, Texas. (https://digital.library.unt.edu/ark:/67531/metadc107985/m1/102/: accessed March 18, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; .