Which is More Important-Vertical or Horizontal Decentralization - Assignment Example

WHICH IS MORE IMPORTANT-VERTICAL OR HORIZONTAL DECENTRALIZATION? Name Institution Professor Course Date Which is More Important-Vertical or Horizontal Decentralization? Introduction The main objective of this essay is to examine the concepts of vertical and horizontal decentralizations with the aim of determining which of the two is the most effective and important approach in the modern society. This is through evaluation of the benefits of vertical and horizontal decentralization processes and techniques as well as their costs or negative implications in the decision-making (Bedner 2010 p. 250). In addition, the approach will be vital in the illustration of the critical concept of decentralization. Based on the appealing benefits, it is essential to note that vertical decentralization is the most important aspect of decentralization in the modern society, organizations, and public entities. Decentralization The concept ‘decentralization’ integrates various elements, which must undergo critical analysis prior to determination if the projects or programs should facilitate reorganization of financial, administrative, and service delivery systems. Decentralization refers to the transfer of authority as well as responsibilities for the public functions from the central authority to the intermediate or local authorities or entities. This makes decentralization of multifaceted concept in relation to the complexities in the transfer of authority, power, and influence as a demonstration of empowerment towards the achievement of the goals and objectives in the modern society (Porio 2012 p. 20). Decentralization is a common concept in the private and public sectors. In addition, it is a common terminology in the fiscal, market, administrative, economic, and political sectors. Some of the reasons behind integration of decentralization of the authority and power include the need for efficiency, equity, and macro-stability in various entities, states, and cities. There are various benefits and limitations of decentralization depending on the need and objective of integrating decentralization approach. One of the main benefits of decentralization is the essence that it facilitates distribution of burden of top executive thus enabling such individuals to share their burden with others at lower levels with reference to delegated authority. This enhances effectiveness and efficiency in the service delivery following the ability of the executives to concentrate on other activities that might include development of the entity. Secondly, decentralization has been essential in increasing the motivation and morale under the influence of delegation of authority (Hamilton et al, 2004 p. 150). Decentralization has also been ideal in generating greater efficiency and output giving emphasis to care and caution in turning inputs into results and appropriate output. In addition, decentralization or delegation of duty has been ideal in the improvement of authority and responsibility among the new sources of power. Decentralization is an accurate approach in enhancing diversification of the activities with the aim of generating employment opportunities through entrusting new managers with new assignments. Decentralization is also an essential technique that would be ideal in promoting substantive co-ordination of the various operations as well as activities. Decentralization enables political, economic, and business agencies to maintain secrecy while minimizing much costs and additional resources. Finally, decentralization enhances effective control and sufficient decision-making in accordance with the standards on the empowerment of the new managers or authorities under the influence of delegation of authority (Tsui et al, 2008 p. 25). On the other hand, there are various limitations in relation to decentralization in the modern society. One of the limitations is the fact that success of the concept relates to the quality of the personnel manning or managing the new decentralized units. This makes it essential to incur training and educational programs and orientation with the decentralized unit of operation. Otherwise, the organization, political, and economic entity might suffer from harmful consequences such as wrong decisions, confusion, and contradictions. In addition, decentralization is only effective in large and strong entities (Dibiaggio 2007 p. 250). This is because of uneconomic and unwieldy aspect of decentralization in small and weak entities. It is much easier to exploit the benefits of centralization in the small and weak entities rather than considering benefits of decentralization. In case of internal growth and development, it is inappropriate to consider decentralization because of the existence of absolute autonomy. Decentralization also proves to be ineffective in case of emergencies. This is because of its tendency to consume time and resources in controlling an emergency situation (Petak 2011 p. 80). In most occasions, the absence of adequate information weakens decentralization in the modern society. In the absence of such resources, it is essential to concentrate in the exploitation of centralization. Finally, decentralization might result in inadequate appraisal and control when it is impossible to break up the entity into different management entities. Having understood the benefits and limitations of decentralization, it is vital to evaluate the concepts of vertical decentralization and horizontal decentralization in diverse contexts (Dibiaggio 2007 p. 250). Vertical Decentralization Vertical decentralization focuses on the delegation of power and authority of decision-making up and down within the entity’s chain of command. The approach draws its functions and concepts from the term ‘vertical’, which relates to the up and down movement. In other cases, vertical decentralization refers to dispersing of the formal power down the chain of authority. In such cases, the executive management might decide to disperse or delegate power or influence to the levels lower down in relation to the vertical hierarchy (Chirikova 2010 p. 50). The main objective of this approach is to enable the management to address or respond to key issues affecting local entities or hierarchies. Like the case of horizontal decentralization, vertical delegation of authority and powers up and down the chain of command is vital and significant. This level of significance will be discussed further in this essay. Firstly, it is essential to note that is possible for entities to delegate power down the chain of authority or command while remaining with the line managers. The main concern of vertical decentralization relates to the power of decision-making down the chain of command from the strategic apex with the aim of achieving a middle line approach in the management of operations and activities of the entity. Three questions are always essential in the context of vertical decentralization (Tsui et al, 2008 p. 25). The first question is how far the chain should the power be delegated within the economic, business, and political entities. The second question relates to coordination or controlling of the vertical decentralization concepts. Thirdly, it is also vital to evaluate the decision powers that would undergo delegation with reference to the vertical hierarchy. In order for vertical decentralization to be effective and efficient towards the achievement of the goals and objectives, it is vital for the organization or political entity to coordinate its decision-making through mutual adjustments and transformations within the hierarchy (Gel'man et al, 2011 p. 450). Vertical decentralization focuses on imposition of three critical coordinating mechanisms: direct supervision, standardization of skills, and outputs. Direct supervision is useful and ideal in the authorization of the major expenditures of the units as well as intervening for any defiant behaviour within the chain of authority. Just like various concepts, vertical decentralization has both benefits and limitations in economic, business, and political contexts. This makes it vital in understanding the importance and significance of the vertical decentralization in comparison to the horizontal decentralization or delegation of authority to various management units (Moorthy 1988 p. 335). Advantages of Vertical Decentralization There are various benefits or advantages of vertical decentralization in different contexts. One of the essential benefits of vertical decentralization is its ability to facilitate substantive increase in the input or transformation of resources to adequate outputs in relation to the objectives of the entity. This is evident because of the increase in the participation of the lowly ranked units in the decision-making process thus increase in the level of motivation and morale towards the achievement of the goals of the organization. In enhancing this effectiveness and efficiency, lowly ranked institutions and individuals enjoy massive empowerment in relation to decision making. It is ideal to note that the lowly ranked management units also participate in the decision-making process as well as management of emergency situation in the modern society. It is vital to promote participation and involvement of vertical units through empowerment and motivation with the aim of enhancing the volume of output as well as efficiency in the service and products delivery (Moorthy 1988 p. 335). In the context of political setting, vertical decentralization is vital in the improvement of the effectiveness and efficiency of policies towards promotion of economic growth and development. This is through involvement of the local leaders and managers in the development and implementation of policies towards reduction of the poverty levels in the various states and cities (Dibiaggio 2007 p. 250). The local leaders and managers as well as native people have substantive information on what is best for the improvement of their conditions. This makes vertical integration an effective and efficient approach towards improvement of the economic growth and development. This is also applicable in the economic context because of the ability of the lowly ranked managers and employees to interact with the consumers and other entities. This makes it ideal for such individuals to exploit their empowerment through vertical decentralization to address the needs and preferences of the consumers. This is vital in the minimization of losses or costs while maximizing revenues and profits at the end of the fiscal end (Khandwalla 1974 p. 90). Another advantage of vertical decentralization is its ability to offer precise and clear lines in relation to the authority as well as control mechanisms in the case of emergency. This is vital in the achievement of high operational efficiency. In the economic and political contexts, the delegated units report to one unit directly above it towards the top management. It is also vital to note that the vertical delegation utilizes defined rules, regulations, functions, and responsibilities. Promotion and decision-making follow these clear guidelines to address the needs of the entities as well as relevant stakeholders in accordance with the regulations of the industry of operation (Kessing et al, 2007 p. 50). Integration of vertical decentralization is also critical in expressing value in relation to the individuals and entities down the vertical order. In addition, these new units of management have the obligation to demonstrate that they are responsible in accordance with their functions and duties. The implementation of vertical decentralization would be accurate in the achievement of this goal with the aim of promoting efficiency and effectiveness of the service and product delivery in the modern society (Jia et al, 2014 p. 210). Vertical decentralization or devolution in the context of Europe and Asian cities and states focus on the promotion of equality through equal distribution of resources and opportunities. This is critical in the reduction of the gap between the rich and the poor within the states and cities. This social welfare significance indicates that vertical decentralization or devolution is more important in comparison to the horizontal decentralization. Despite the presence of these benefits, vertical decentralization also has limitations. It is essential to consider these limitations with the aim of making accurate decisions on the exploitation of the vertical decentralization in the modern society (Cantarero et al, 2012 p. 220). Limitations of Vertical Decentralization Vertical decentralization or devolution in the context of Europe and Asia also has limitations such as inefficiency that might develop from lack of substantive training and educational expertise to aid the operation of the new management units. Devolution or vertical decentralization is one of the most complicated concepts in the modern society in relation to its adoption and implementation towards the achievement of the goals and objectives in areas of operation. In addition, vertical decentralization or devolution might contribute to embezzlement of funds or corruption because of the increase in different stages of decision-making towards the achievement of the goals and objectives in relation to development plans in the states and cities in Europe and Asian continents. It is essential to note that an increase in the levels of decision-making is accompanied by ineffectiveness in the service delivery (Schragger 2010 p. 1900). Furthermore, the vertical decentralization or devolution might contribute to the increase in the level of inequality rather than its reduction because of incompetent leaders in the new management units. This makes devolution to be costly in relation to inadequate resources and expertise in the management of the new responsibilities as well as duties. It is essential for the relevant authorities to evaluate and minimize the potentiality of the above limitations in order to maximize the output of vertical decentralization (Liberati et al, 2011 p. 400). Horizontal Decentralization Horizontal decentralization relates to shift of the formal authority to informal authority following the involvement of non-managers in the delegation process. This type of decentralization has two concepts: transfer of power out of the line structure illustrating informal power and substantive information control. In addition, there are four stages of horizontal decentralization. The power rest with a single individual in relation to the office he or she occupies. Secondly, the shift of power relates to the influence of the system of standardization with reference to the decision of others (Jin et al, 2013 p. 10). Furthermore, power goes to the experts, specialists, and operators in case they are professional by the virtue of their knowledge. Finally, power goes to everyone with reference to the membership to the organization or political institution. Horizontal decentralization relates to the shift of decision-making power from the central ministry of finance to the ministries of education as well as health with the aim of strengthening the legislative and judicial branches of the government. Just like the case of vertical decentralization, horizontal decentralization has substantive benefits as well as limitations towards the achievement of the goals and objectives (Aronsson et al, 2012 p. 225). Benefits Horizontal decentralization in the European and Asian continents focuses on the empowerment of various ministries within the government. This is through shifting of the decision-making power from the finance or other relevant ministry to other ministries such as education and health. This ensures that the ministries minimizes channels in decision-making thus accuracy and efficiency in the process. In the horizontal technique of delegation, the community or the society is the principal while the local government is the agent. This is different from the vertical decentralization in which the central government is the principal and the local government is the agent towards the achievement of objectives and targets (Brown 1999 p. 450). In addition, horizontal decentralization focuses on the empowerment of the key arms or branches of the government. This is through shifting of decision-making power to other arms of the government such as legislative and judiciary branches of the government in addressing the needs and preferences of the society members. These developments will enable the society members to enjoy substantive resources aided with effectiveness and efficiency in the delivery of the products. Furthermore, horizontal decentralization focuses on the promotion of equality in the case of unequal distribution of resources within the state or major cities in the context of European and Asian nations and other countries across the globe (Diprose 2009 p. 120). Limitations Horizontal decentralization has its defects towards the achievement of economic growth and development. For instance, horizontal depends on the vertical integration or decentralization to achieve success towards improving the living conditions of the individuals within the local areas as well as government levels. In addition, horizontal decentralization does not have substantive benefits in relation to availability and integrity of information with reference to the living conditions of the local society members. Moreover, the state or nation has to incur huge costs in relation to the achievement of effectiveness and efficiency in the service delivery (Petak 2011 p. 80). Horizontal decentralization is also associated with some elements of corruption as well as exploitation of the society members through unnecessary taxation systems. This makes it ideal for the state to ensure that appropriate and trained personnel are empowered through the shift in the decision-making power or authority. From this perspective, it is essential to note that most states would prefer vertical decentralization because of its ability to have a clear source of power as well as delivery of services and products effectively and efficiently to the society members (Montero 2001 p. 58). Significance of the Vertical Decentralization vs. Horizontal Decentralization I think vertical delegation or the concept of devolution is vital towards the achievement of the goals and objectives of development and economic growth in the major cities and states in the European and Asian continents. The main benefit of vertical delegation is the fact that it brings power closer to the people. This is an illustration of better information about the local conditions, adequate efficiency, and lower transactions costs with reference to the number of the local level of government (Maringanti 2012 p. 100). In addition, the vertical decentralization offers an effective opportunity to learn to the administratively weaker local governments. This is through flexibility and improved scope of innovation with experimental success in the context of China. It is also vital to note that vertical decentralization enhances participation of the local people through generation of local taxes as well as introduction of new tax systems for the benefits of direct expenditures. From this perspective, it is essential to note that vertical decentralization is helpful in the achievement of an agreement between the quality and quantity of the public goods (Painter 2008 p. 85). Furthermore, vertical decentralization aids the success of horizontal decentralization within the society. This is through promotion of democratization at both the central and local levels. Moreover, the local people have the opportunity to voice their concerns and preferences in relation to the local government. On the other hand, it is vital for the relevant authorities to address arguments against vertical decentralization such as weak human capacity at the local government levels subjective to the power of the local elites (Kessing et al, 2007 p. 50). This leads to development of ethical issues such as corruption and exploitation of the locals through introduction of unnecessary taxation systems. Vertical decentralization might be also critical in the generation of ethnic issues in the political sphere thus creation of inequality in accordance with the existing discriminations. Vertical decentralization might contribute to inequality in the case of unequal resource distribution in various levels of the society. Overall, vertical decentralization has the tendency to increase the total expenditure on the public goods as well as inequality across the regions. In spite of these arguments, it is vital to note that the benefits of vertical decentralization overweigh its costs or limitations within the society (Ayres et al, 2014 p. 230). List of References Liberati, P, & Sciala, A 2011, 'How economic integration affects the vertical structure of the public sector', Economics Of Governance, 12, 4, pp. 385-402. 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