This, in turn, makes it difficult to coordinate the overall activity. While talking about the advantages and disadvantages of decentralization , it is imperative to note that substantial autonomy is enjoyed by every single division. This relieves their workload which eventually is for the greater good of the organisation.ĭisadvantages of Decentralization Difficult To Co-Ordinate Top executives can focus more on more on the executive level work like planning and decision making if the lower level employees take all the responsibilities on their own. A cadre of satisfied manager is build up by this satisfaction as they feel responsible towards the company’s betterment. Satisfaction of Human needsĭecentralization serves as an important tool for satisfying our basic need of independence, power, prestige, and status. Performance evaluation of each decentralized unit helps in exercising adequate control. This, in turn, leads to greater efficiency in supervision. They can even take disciplinary actions and recommend the promotion of their peers. Lower level managers can alter production schedules and work assignments with adequate authority. This might often result in the opening of new business units in varying geographical locations.ĭecentralization unleashes the fullest potential of the organization and can react easily to area-specific requirements. Ease of Expansionĭecentralization can add inertia to the expansion process of a growing business. This makes the communication system more efficient as intimate relationships develop between superiors and subordinates. The wider span of management under decentralization leads to fewer hierarchical level. This, in turn, results in faster and accurate decisions which are well aware of the real scenario. Quick Decision MakingĪnother important pointer in the advantages and disadvantages of decentralization is that decisions are taken and executed by authorized personnel. They even develop managerial skills and help in solving the succession problem which ultimately ensures the growth and continuity of an organization. While carrying out a discussion on the advantages and disadvantages of decentralization, it is imperative to note that it aids subordinates in exercising their own judgment. In this way, the top-level management can create healthy competition amongst different divisions. Under decentralization, every single product division attains sufficient autonomy to exercise their creative flair.
Learn more about Factors determining Decentralization here in detail Growth and Diversification
Intro to Organisation and its Importance.
Decentralization also promotes a spirit of group cohesiveness and spirit. Advantages and Disadvantages Of Decentralisation Advantages of Decentralisation Motivation of Subordinatesĭecentralization improves the level of job satisfaction as well as employee morale, especially amongst the lower level managers.įurthermore, it strives to satisfy the varying requirements for participation, independence, and status.
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