For example, in an automotive company, the sales function can be distributed in the product department or decentralized, while labor relations can remain centralized. The extent to which decentralization exists in an organization depends on the extent to which there is clear decision-making power at levels below the senior management level. Decentralization is often associated with the concepts of participation in decision-making, democracy, equality and freedom from a higher authority.   Decentralization strengthens the democratic voice.  Theorists believe that local representative authorities with real discretionary powers are the basis for decentralization, which can lead to local efficiency, equity and development.  Columbia University`s Earth Institute has identified one of three main trends related to decentralization: „Increased involvement of local jurisdictions and civil society in the management of their affairs with new forms of participation, consultation and partnerships.“  According to Louis A. Allen – „Decentralization refers to the systematic effort to delegate all authority to the lowest level, except those that can only be exercised at the central points. Decentralization is about handing over authority in terms of responsibilities. Successful and appropriate decentralization requires a full and effective delegation of authority. Reporting or reviewing the details before subordinate decisions are made will render decentralization ineffective. However, it should be remembered that decentralization does not necessarily mean a distribution of authority in relation to all activities.
If decisions involving more functions are allowed at lower levels, decentralization will be more important. On the other hand, if only operational decisions are taken at lower levels, decentralization will be less. If finance-related decisions are made at a lower level, the degree of decentralization will be higher. Decentralization depends on the size of the organization. The larger the company, the greater the number of decisions and the need for decentralization of authorities. It can be difficult to measure local capacity, and the debate over its quantification has often been driven by political concerns as well as technical considerations about the ability of local governments to deliver services. (J. Widner, 1994). Central governments have used the pretext of „lack of capacity“ to refuse to transfer their authority, financial resources and associated privileges to local entities.
For example, A. Fiszbein (1997) in Colombia found that „what was characterized (by national agencies) as poor planning in municipalities was in fact a real disagreement between local and national priorities.“ Municipalities have in fact demonstrated considerable local capacity by rejecting conditional counterpart grants from central authorities and borrowing locally at market rates to implement their own priorities. Earl P: „Strong refers to the decentralization of work between the different units of a company. He says that decentralization will require the delegation of powers to the leaders of the various entities. They should have sufficient powers to operate the units independently of each other. The character and philosophy of senior managers have a significant impact on the extent to which authority is decentralized. If senior managers believe in individual freedom, there will be a high degree of decentralization. But if senior managers are conservative and prefer centralized control, there will likely be a centralization of authority. It promotes self-sufficiency and trust among subordinates, because when authority is delegated to lower levels, they must rely on their judgment. Through such delegation, managers are constantly challenged and must find solutions to the problems they face in their daily operations.
Those who examine the objectives and implementation processes of decentralization often use a theoretical approach to systems. The United Nations Development Programme report applies to the theme of decentralization „a holistic perspective of the system, including levels, spheres, sectors and functions, and considers the community level as the entry point where holistic definitions of development goals emanate from the people themselves and where it is most practical to support them. It is a question of considering the multi-level frameworks and the continuous and synergistic processes of interaction and iteration of cycles as crucial to achieve fullness in a decentralized system and to maintain its development.  Centralization, on the other hand, is a warning to maintain authority at the central points of the organization. All that increases the importance of the role of subordinates is decentralization, and all that helps reduce it is centralization. According to Koontz O`Donnel, „Decentralization is a fundamental concept of delegation; to the extent that this power is delegated, it is decentralized.“ Appropriate centralisation means the establishment of policies and procedures that affect the whole organisation and whereby the supervisory authority ensures uniformity of measures and close coordination and control of the different operational units. The European Union follows the principle of subsidiarity, which states that decision-making must be taken by the most competent local authority. The EU should only decide on listed issues that a local authority or a Member State cannot deal with itself.
In addition, enforcement falls exclusively within the competence of the Member States. In Finland, the Centre Party explicitly supports decentralisation. For example, ministries have been moved from the capital Helsinki to the provinces. The Centre supports substantial grants that limit possible economic and political centralisation towards Helsinki. If an organization sets up sub-units called departments, if each department is considered a separate profit center and enjoys considerable autonomy in terms of responsibility and authority in management decision-making, the organization is considered decentralized. (10) The design of decentralisation depends on the requirements of organisational objectives, organisational structure and company policy. If decisions are submitted to superiors for approval, decentralization will be less. If subordinates are free to make their own decisions, decentralization will be more important. fewer people consulted; And the lower they are in the hierarchy of management, the higher the degree of decentralization. The availability of qualified leaders directly affects the degree of decentralization, since the exercise of authority requires the competence of those who exercise authority. If managers at lower levels are capable and experienced, there are more opportunities for decentralization.
The lack of trained leaders limits decentralization. Decentralization involves the dispersion of decision-making power to the lower levels of management. If the power to make decisions and formulate policies is not with a single person at the top, but is passed on to different people at different levels, it will be a case of decentralization.