Question

Discuss some advantages and disadvantages of Decentralization

Answer 1

Advantages of Decentralisation:

1. Distribution of burden of top executive—Decentralisation would enables to its top executive level to share work burden with employees at lower levels as the authority can be delegated. The top executive managers are relieved of some burden, thus can utilize the time and energy to concentrates on activities for the better improved plans than their competitor

2. Increased motivation and morale — Decentralisation would increase the morality of the employees since they have more responsibility as delegation of authority prevails. Decentralisation helps to increase employee’s morale because it involves delegation. Thus quick decisions regarding the production and marketing will happen and would help in moving ahead to competitor

3. Greater efficiency and output—Decentralisation lays emphasis on care, caution and enthusiastic approach to the work, consequently results in increased efficiency and output. This is again possible due to delegation of authority and responsibility.

4. Diversification of Activities—Decentralisation would helps in diversification of activities. It crests enhancement in the work profile of the employee thus would be a motivation to them.

5. Better Co-ordination—With the decentralised set up there is an improvement in coordination among various operations and activities, and it would result to saving of time and coping with the competition in the market

6. Maintenance of Secrecy — Decentralisation enables to maintain secrecy in the organisation without additional cost and unnecessary trouble. It would be an addition advantage to the company

7. Facilitate effective control and quick decision-Decentralisation facilitate to measure the work of employees according to standard easily and quickly which in turn helps in taking up quick decision. Quick decisions are very necessary when time is a limit because of the severe competition

Disadvantages of Decentralisation:

A decentralised organisation suffers from the following disadvantages:

1. More cost—Decentralisation is costly since it encourages duplication of functions and equipments in the organisation. It cannot be adopted by small organisations because of the cost concern.

2. No specialisation — Specialisation suffers in decentralisation since all employees becomes jack-of-all-trades but master of none. In this way the specialisation is affected.

3. Need more specialists-In decentralisation more specialists are required. As they are large in numbers, therefore the services of specialists are not utilised effectively and efficiently,

4. No uniform action — In decentralisation it becomes difficult to maintain uniformity in action since routine and methods differ from an organisation to organisation, department to department, etc

5. No equitable distribution of work — It is hard to distribute workload equitably among different employees.

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