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delegation

(dĕl'ĭ-gā'shən) pronunciation

1. The act of delegating.
2. The condition of being delegated.
A person or group of persons officially elected or appointed to represent another or others.

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Small Business Encyclopedia: Delegation

Delegation is the practice of turning over work-related tasks and/or authority to employees or subordinates. Small business owners often have difficulty with delegation for a variety of reasons, from concerns about the abilities of subordinates to long-standing "hands-on" management habits (a common characteristic of successful entrepreneurs). Indeed, "businesses founded on the creative talents of the owner often struggle with [delegation] because the success of the enterprise depends on the owner's style," wrote Linda Formichelli in Nation's Business. But small business consultants warn that owners that do not learn to delegate responsibilities and tasks often end up stunting their company's growth.

THE NEED FOR EFFECTIVE DELEGATION PRACTICES. "Many managers think of delegation as a task—an activity to be carried out and forgotten. In reality, delegation is a process that makes up a critical component of successful management," wrote Janet Houser Carter in Supervisory Management. "To get work done with and through others, a manager must regularly give authority to his or her staffers. This shows staffers that the manager has faith in their abilities—which is what makes delegation such a powerful motivational tool."

A propensity for micromanagement—or nanomanagement, as it is sometimes called when applied to a small business firm—can have a deleterious impact on a company in a variety of ways. Moreover, many analysts contend that a lack of delegation can be particularly detrimental to the fortunes of smaller businesses. "In small, entrepreneurial companies, micromanagement by one person—typically the owner—can be especially growth-inhibiting because it can have a proportionately larger sweep through the firm than micro-management by one executive in a large company," wrote Formichelli. Business consultants thus counsel their clients to practice sensible delegation of tasks to their employees—even in instances where they might not do as good a job initially. "Employees can't learn unfamiliar tasks if they never get the chance to learn and practice them," noted Carter. "In the short term, it may make sense to do it yourself; over the long term, however, you save more time by showing others how to do the job."

Of course, not all tasks or responsibilities should be delegated to employees. Small business owners need to take care of basic strategic and planning issues themselves, and other management duties—conflict resolution, performance evaluations, etc.—should be delegated judiciously.

Business experts cite a number of specific problems that are often associated with companies that do not effectively delegate. These include:

Poor employee morale—An inability or refusal to delegate can have a corrosive impact on the morale of good employees that want to contribute their talents to the business in a meaningful way. "Delegating work to subordinates helps to develop them for their own career advancement as well as improve their management skills," wrote W.H. Weiss in Supervision.
Burnout—Even the most talented, ambitious, and energetic entrepreneurs are apt to run out of gas if they insist on tackling all major aspects of a company's operation. Some small business owners can manage all or most important tasks for the early life of a company. Indeed, some small businesses—especially single-person enterprises like freelance graphics design or editorial services—may be able to handle all significant aspects of a company's operation for years on end. But for the vast majority of small and mid-sized businesses enjoying a measure of growth, owners sooner or later must face the reality that they cannot undertake all duties and responsibilities.
Misallocation of Personal Resources—Small business owners and entrepreneurs who do not delegate often run the risk of using too much of their time on routine tasks and not enough time on vital aspects of the company's future, such as strategic planning, long-range budgeting, and marketing campaigns.
Damage to Company Image—Business owners who do not empower their employees, insisting instead on attending to all relevant aspects of his or her business themselves, run the risk of inadvertently suggesting to customers and vendors that the company's workforce is not competent and/or trustworthy.
Damage to Company Health—This should be the bottom-line consideration of all entrepreneurs running their own business. If micromanagement is slowing processing of work orders, hindering development of new marketing efforts, or otherwise causing bottlenecks in any areas of a company's operation, then it may be eating away at the company's fundamental financial well-being.

Small business owners are encouraged to evaluate whether they are perhaps falling into the trap of micromanagement. Consultants and entrepreneurs cite the following as major warning signs:

Taking work home in the evening or working long hours of overtime
Failure to give important tasks the amount of attention that they warrant
Basic company documents (like business plans) are not updated for long periods
Excessive amounts of time spent going over work already completed by employees
Completing important tasks with little time to spare (or a day or two late)
Spending inordinate amounts of time on relatively unimportant or routine jobs
Vacations assume mythic status
Unhappy employees
Unhappy family members

KEYS TO EFFECTIVE DELEGATION. Effective delegation is ultimately predicated on ensuring that the company's workforce is sufficiently talented and motivated to take on the responsibilities that are delegated to them. "New entrepreneurs often have difficulty figuring out what kind of workers to hire," remarked Formichelli. "If the wrong people are hired, they require more training and supervision, which invites nanomanagement." Sound hiring practices and adequate training are thus universally regarded as major factors in establishing a healthy system of delegation. Once those aspects have been addressed, there are other considerations that can be studied as well. These include:

Work Environment—Establish a positive work environment where employees are not paralyzed by fear of failure or dismissive of tasks that they think is beneath them. Owners and managers need to emphasize tools of motivation and communication to nourish employee enthusiasm.
Plan for Delegation—A company that is armed with a strong, clear vision of its future—and the role that its employees will play in that future—is far more likely to be successful than the business that does not plan ahead.
Review Responsibilities—Business owners and managers need to objectively examine which tasks that they have previously taken care of can be delegated to others. "Reserve for yourself those tasks which require the experience, skill, and training which only you possess," wrote W.H. Weiss in the Supervisor's Standard Reference Handbook.
Selection of Appropriate Employees for New Responsibilities—As every personnel manager knows, some members of the work force are better suited to take on new responsibilities than others. When reviewing potential candidates to take on additional responsibilities, business owners should consider level of employee motivation and ambition, skill sets, level of allegiance to the company, and emotional maturity.
Established Policies—Detailed manuals of policies and procedures can go far toward eliminating the uncertainties that hamstring some delegation efforts.
Prepare for Bumps in the Road—Even the best-planned delegation efforts can go awry, leading to short-term productivity/profitability losses. Indeed, risk is an inherent element of the delegation process, and some errors or misjudgements may occur as workers adjust to their new responsibilities. "Employees need to be reassured that the manager will be there to offer assistance or clarification, and that mistakes during the learning period are to be expected," said Carter. "Mistakes should be viewed as opportunities to teach, not punish."
Training—Delegation of tasks and responsibilities is far more likely to be successful if the employees have the knowledge necessary to fulfill their new duties. "The fact that no one has the skills to complete a task you are handling doesn't mean you should avoid delegation—it means you should train," wrote Alice Bredin in Los Angeles Business Journal. "While building the skills of an employee requires an investment of time, that investment will pay off."
Communication—"Be clear and concise when delegating," said Weiss. "Right from the beginning you must clarify what decisions you are delegating and what you are reserving for yourself. Delegating fails when the person to whom you have delegated a task fails to perform it or makes a decision beyond the scope of authority granted." Conversely, delegation can also fail if the business owner hands off a responsibility, but does not give his or her employee the necessary level of authority to execute that responsibility. "If you overlook this, you may cause the person delegated to suffer frustration and stress because he or she was given an assignment yet not given the authority and power needed to accomplish it properly," wrote Weiss in Supervision.
Provide Advisory Role—Small business owners should make sure that they keep lines of communication open at all times after delegating responsibilities. Employee questions and uncertainties about their new responsibilities are perfectly natural, so owners should make themselves available for questions and maintain a nonjudgemental, helpful stance.

Ultimately, small business owners need to recognize that delegation can help a business grow and prosper, and that good employees, when used intelligently, can be a significant advantage in the marketplace. "The manager who wants to learn to delegate more should remember this distinction," wrote Thomas S. Bateman and Carl P. Zeithaml in Management: Function and Strategy. "If you are not delegating, you are merely doing things; the more you delegate, the more you are truly building and managing an organization."

Delegation Theories

Several theories stemming from economics and politics have sought to explain delegation, both in terms of why it is undertaken in the first instance and how it functions.

Principal - Agent Theory

Principal-Agent theory conceives of delegation as involving firstly a 'principal' who for a particular reason decides to delegate authority over a particular policy area (for example) to another actor or organisation - the 'agent'. It is generally conceived of as more of a framework than a predictive theory and it incorporates a wide variety of forms. Generally speaking there have been two areas of primary focus, firstly that concerned with 'agency loss' which roughly corresponds to the extent to which decisions/policy outcomes arrived at by the agent differ from the goals of the principal. This in turn leads to theories concerning how to minimise agency loss whilst maintaining the benefits of delegation. Such theories tend to emphasise the use of ex ante and ex post controls which can help ensure compliance, though every principal-agent approach stresses that principals and agents always have separate interests and as such a beneficial delegation will always result in some element of agency loss.

Secondly there is the focus on 'informational asymmetries' whereby the agent is assumed to possess an advantage in terms of expertise in the particular area which it is delegated authority in. For instance if a local government decided to delegate refuse collection to a private firm, after a suitable amount of time the private firm would possess expertise in this area that would put it in an advantageous position relative to the principal. As such the agent could use this informational advantage to shape the relations between themselves and the principal to achieve more favourable outcomes - for instance the principal in this example may not know exactly how much funds are required to carry out the task of refuse collection effectively and will rely on the agent to provide them with this information, as such the agent is given the opportunity to extract more funds than is necessary to carry out the task.

Carltona Principle

Used by the UK civil service. In summary the principle supports delegation of authority but not responsibility.

Section 1 of the civil service act 1992 allows delegation to take place, but limits the powers to do so in three ways -

the functions to be delegated must be management functions;
they must have been the subject of Transfer of Functions Orders; and
they must relate to the management of the Civil Service.

Most delegations are made under this section of the Act. However for the minority of civil servants whose terms and conditions of service are determined under powers in primary legislation which govern the organisations in which they work Section 2 of the ACt applies. The statutes in these cases usually require Ministers and statutory office holders to obtain the consent of the Minister for the Civil Service to the terms and conditions of their staff. The Civil Service (Management Functions) Act 1992 allows the Minister for the Civil Service to authorise the exercise of these powers without his consent. The policy has been to delegate to Ministers who can then authorise an official (e.g. Permanent Secretary, Chief Executive) to exercise the function in his name under the Carltona principle.

The Principle allows a person in whom a power is vested to authorise another person to exercise that power for and on his or her behalf. It is essential to note at the outset that a person exercising a power for and on behalf of another does so as the ‘agent’ or ‘alter ego’ of the person in whom the power is vested. That is, the act of the authorised person is, at law, the act of the person in whom the power is vested. This is fundamentally different to the act of a delegate which, at law, is the delegate’s and not the delegator’s act.

The case most often cited as authority for the proposition that a person may authorise another to exercise a power for and on his or her behalf is Carltona Ltd v Commissioners of Works 1943. This was a wartime case dealing with the requisition by the Government of a factory which manufactured food products. In Carltona, the English Court of Appeal considered whether a Minister had to exercise personally a power to take possession of land, or whether the power could be exercised by one of the Minister’s departmental officials for and on behalf of the Minister.

The court concluded that the power in question could be exercised by a departmental official for and on behalf of the Minister. The court’s reasoning indicates that there are two grounds which justify a Minister being able to authorise an officer to exercise a power vested in the Minister -

the Minister is ultimately responsible to Parliament for the decision of an authorised officer; and in modern government, Ministers have so many functions and powers that administrative necessity dictates that they act through duly authorised officers.

Delegation as a credible commitment

This section of the literature has purported to explain delegation as a solution to the problem of 'credible commitments'. In short this states that in certain situations an actor will choose to delegate authority to another actor or organisation in order to constrain their own behaviour and provide credibility to a particular obligation they have entered into. To give one of the sillier examples present in the literature there is that of three blind men left alone in a room with a cake. They all enter into a pact that none of them will eat the cake, but as nobody is capable of enforcing this agreement they decide to delegate authority to one of their friends who can watch over them to ensure nobody breaks their commitment and sneaks off with a slice. In this way delegating authority is seen as overcoming collective action problems.

This theory has been applied most prominently in the context of democratic pressures which impact on a government's ability to uphold international agreements. Two factors are seen as causing this problem, firstly the problem of 'time inconsistency' whereby what is the best short-term solution to a problem may be different to the optimal long-term solution. In this instance a government may agree to carry out the long term course of action, but when faced with the pressures of winning an election will resort to the short term course of action which undermines the agreement. To overcome this problem the government will delegate authority to an actor or organisation so as to ensure that the correct long term policy is carried out even when it is not electorally desirable. Secondly there is the problem of 'political property rights' which refers to the fact that as democracies have the potential to replace one government with another government who support opposing policies, the agreements made by one government must be somehow enforced by an independent authority so that they constrain future governments from breaking them.

Applications of Delegation Theory

Independent Central Banks and Non Majoritarian Institutions

One of the most important areas where delegation theories have been applied has been in the debate over the merits of Independent Central Banks (ICBs) such as the Bank of England or the European Central Bank. This debate has corresponded to the theories of credible commitments and can be understood as a solution to problems posed by the two democratic pressure problems mentioned above where monetary policy is concerned. Those in favour of the creation of ICBs have primarily focused on interest rates and have argued that democratic pressures tend to have an inflationary effect as governments will often be tempted to advocate higher interest rates immediately prior to an election so as to manufacture short term booms in the economy and boost their support - but to the detriment of long term economic health. A variant of this argument is that as most democracies incorporate two main parties split on economic policy between left and right, the party of the left winning power will often result in damaging inflation raising policies immediately after the election in an effort to distance itself from the previous government. A solution to these problems has naturally been sought in the creation of an independent institution which can decide interest rates outside of the influence of democratic pressures - the ICB.

This argument has been highly influential and the number of ICBs has risen dramatically since the 1980s however it is not without its critics. Many scholars (for instance Kathleen Mcnamara) have questioned the premisses of the ICB argument, making the case that democratic pressures will not result in high inflation and that high inflation is not inherently bad for the economy long term. Broadly speaking the empirical evidence on these points has tended to be inconclusive for both sides. An alternative criticism has come from certain branches of New institutionalism who have sought to explain the increase in ICBs not by the 'rational' argument outlined above, but as a process of symbolism, where governments will create ICBs because they are seen to be respectable institutions by other actors, particularly by foreign investors who, it is argued, will view a country with an ICB as a modern state worthy of investment.

The European Union

Delegation theories have also been applied extensively in studies of the European Union. The dominant approach has undoubtedly been the principal-agent approach, but there have also been variations from the classic form by intergovernmentalist approaches and the 'fiduciary' model laid out by Giandomenico Majone.

Andrew Moravcsik is perhaps the most prominent intergovernmentalist theorist who has written on delegation and his work can essentially be thought of as applying the principal-agent model in a manner which stresses minimal agency loss. The model is not a simple principal-agent model however, as he conceives of the EU as delegation on three levels. Firstly there is the delegation from European electorates to national governments (who in this sense act as agents), secondly there is the delegation from national governments (who now act as principals) to European institutions such as the European Commission. Moravcsik has been particularly interested in the informational asymmetries which arise from delegation in the European Union and has argued that whilst there is minimal agency loss between the national governments and the European institutions, the national governments gain significant informational advantages over European electorates which allow them to carry out policies at home which they would not be able to do in the absence of the European Union. In this sense the delegation process strengthens the national governments rather than weakening them (as is traditionally assumed where the European Union is concerned). This has nevertheless been seen as inconsistent by some scholars (for instance Mark Pollack) who take issue with the assertion that informational advantages only allow national governments to gain freedom from European electorates and that the same principle applies with European institutions gaining an advantage over their principals through informational asymmetries.

In contrast Giandomenico Majone has formulated a theory of delegation which stresses the importance of credibility problems in the decision to delegate to European institutions. Not only is this explained as a mechanism to ensure member states comply with treaty obligations, but employing similar logic as that used in the ICB debates he makes a defence against democratic deficit arguments which advocate a directly elected European Commission. Much in the same way as in the ICB debate democratic pressures are seen as impacting negatively on what is a primarily regulatory institution and as such for Majone the Commission should be insulated from democratic pressures if it is to fulfil its functions effectively.

References

Fabrizio Gilardi, "The same, but different. Central banks, regulatory agencies,

and the politics of delegation to independent authorities"

Giandomenico Majone, "Two Logics of Delegation: Agency and Fiduciary Relations in EU Governance" European Union Politics.2001; 2: 103-122

Kathleen Mcnamara, "Rational Fictions: Central Bank Independence and the Social Logic of Delegation" West European Politics, 25 (1)

Andrew Moravcsik, "The Choice for Europe"

External links

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Translations: Translations for: Delegation

Dansk (Danish)
n. - delegation, deputation, beskikkelse

Nederlands (Dutch)
afvaardiging, machtiging

Français (French)
n. - délégation

Deutsch (German)
n. - Abordnung, Delegation

Ελληνική (Greek)
n. - αποστολή, εντολή, πληρεξουσιότητα, αντιπροσωπεία, μεταβίβαση/(υπ)ανάθεση (αρμοδιοτήτων κ.λπ.)

Italiano (Italian)
delegazione

Português (Portuguese)
n. - delegação (f)

Русский (Russian)
делегация

Español (Spanish)
n. - delegación, el acto de delegar

Svenska (Swedish)
n. - delegation, överlåtande

中文（简体） (Chinese (Simplified))
代表团, 派遣代表, 派遣委员团

中文（繁體） (Chinese (Traditional))
n. - 代表團, 派遣代表, 派遣委員團

한국어 (Korean)
n. - 대표 파견, 사절단, 위임

日本語 (Japanese)
n. - 代表団, 使節派遣, 代表者任命, 委任

العربيه (Arabic)
‏(الاسم) تفويض, توكيل, وفد مفوض‏

עברית (Hebrew)
n. - ‮נציגות, משלחת, הסמכה‬

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		Dictionary. The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2007. Published by Houghton Mifflin Company. All rights reserved. Read more
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