Delegation of authority is necessary for the smooth functioning of a business. It increases the working capacity of a manager. 

Effective delegation can lead to the following benefits: 

1. Effective management: Delegation enables superiors to assign the routine activities to the subordinates and he can concentrate on other important functions. Thus, a manager can increase his effectiveness by using the skills of subordinates through delegation of authority. 

2. Employee development: Employees get more opportunities to utilize their talent. It motivates them to develop themselves for higher positions, as they are given opportunities to use their skills and talents for gaining excellence in their jobs. 

3. Facilitates growth: Delegation facilitates growth and expansion by providing trained and experienced personnel for taking up leading positions in new project. 

4. Basis of management hierarchy: Delegation of authority determines who has to report to whom. It creates the chain of superior-subordinate relationship which is the basis for hierarchy of management. 

5. Better co-ordination: The elements of delegation namely authority, responsibility and accountability clearly defined powers, duties answerability related to various departments. This helps to avoid overlapping of duties and brings better coordination among various departments and functions of management. 

6. Quick decision making: The subordinates are given authority to take decisions. They need not go to their superiors from time to time for taking decision on routine matters. This increases speed of decision making.