Question

State any three points of significance of decentralisation.

Answer 1

1. Develops initiative among subordinates: Decentralisation Helps to promote self-reliance and confidence amongst the subordinates. This is because when lower managerial levels are given freedom to make their own decisions, they learn to depend on their own judgement.
2. Develops managerial talent for the future: decentralisation gives them a chance to prove their abilities and creates a reservoir of qualified manpower who can be considered to fill up more challenging positions through promotions.
3. Quick decision-making: In a decentralised organisation, since decisions are taken at levels that are nearest to the points of action and there is no requirement for approval from many levels, the process is much faster. There are also less chances of information getting distorted because it doesn’t have to go through long channels.
4. Relief to top management: Decentralisation diminishes the amount of direct supervision exercised by a superior over the activities of a subordinate because they are given the freedom to act and decide, albeit within the limits set by the superior. Decentralisation also leaves the top management with more time, which they can devote to important policy decisions rather than occupying their time with both policy and operational decisions.
5. Facilitates growth: Decentralisation awards greater autonomy to the lower levels of management as well as divisional or departmental heads. With each department doing its best in a bid to outdo the other, the productivity levels increase and the organisation is able to generate more returns, which can be used for expansion purposes.
6. Better control: Decentralisation makes it possible to evaluate performance at each level and the departments can be individually accountable for their results.