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Decentralisation is an Optional Policy. Explain Why an Organisation Would Choose to Be Decentralised. - Business Studies

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ConceptImportance of Decentralization

Question

Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.

Solution

Decentralisation is an optional policy because whether or not an organisation should be decentralised is upto the top order management to decide it. An organisation should be de decentralised because of the following reasons:-

• Develops initiative among subordinates- Decentralisation helps to promote self reliance and confidence among the subordinates. It gives them the power to judge and accordingly take a decision during a problem. They don’t have to depend on the higher authority and take their best judgement. This improves their confidence and prepares them to become leaders.

• Develops managerial talent for the future- Along with the training, it is the experience which makes a person fully job fit. Decentralisation gives them the chance to prove their worth and their talents create a reservoir of qualified manpower who can solve more challenging problems through promotions.

• Quick Decision making- In Decentralised organisations, the time taken to solve the problem is fast as it doesn’t depend on the advice of the superior authority. There is no requirement of any approval or any long channels which takes sufficient amount of time.

• Relief to the top management- Since decentralisation gives the power to the subordinates to tackle a situation on their own; it doesn’t involve the higher authority to approve or see to solve every problem. By this way, they could save a lot of time and utilise it in making other business policies or expanding the business.

• Facilitates growth- As decentralisation gives the authority to the subordinates to tackle and solve the problem on their own, it enables the whole unit to function efficiently. Consequently there are high returns and the business can be expanded fruitfully.

• Better Control- Decentralisation enables to evaluate the progress of a unit at a time and the members can be held accountable for the results. It enables the management to take necessary actions so that a unit can become more efficient.

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Solution Decentralisation is an Optional Policy. Explain Why an Organisation Would Choose to Be Decentralised. Concept: Importance of Decentralization.
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