Which term refers to the practice of distributing decision-making authority closer to the point of service?

The practice of distributing decision-making authority closer to the point of service is known as decentralization. This approach allows organizations to operate more efficiently by enabling local managers and employees to make decisions that are best suited to their specific situations. It often leads to faster response times and can improve customer service, as those directly involved in day-to-day operations have the authority to make choices that affect their work and interactions with customers.

Decentralization is particularly beneficial in large organizations where local conditions and customer preferences can vary significantly. By empowering teams to take initiative and make decisions, organizations can foster a more agile and responsive environment. This is contrasted with centralization, where decision-making authority is concentrated at higher levels of the organization, which can lead to slower response times and a lack of flexibility.

Empowerment and autonomy, while related concepts, focus more on the individual level of authority and decision-making ability rather than the distribution of that authority across the organization as a whole.