Question

Explain why an organisation would choose to be decentralised.

Explain the advantages of decentralisation of authority.

Answer 1

The importance of decentralisation is reflected in the following points:

1. Relief to top management: Because operational decisions are made at lower levels, decentralisation gives top management more time to make crucial policy decisions. There is less need for human supervision and less need to verify judgements made at lower levels.
2. Quick decision-making: Decisions are made at the levels closest to the action in a decentralised organisation. Higher levels of approval are not required. As a result, judgements can be made faster.
3. Development of managerial talent: Lower level managers have the opportunity to learn and gain experience in leadership and decision-making through decentralisation. It encourages self-assurance and independence in them. Finding executives with leadership potential is another benefit of decentralisation.
4. Growth and expansion: Lower levels of management are given autonomy through decentralisation. It encourages constructive departmental competition. Sharing the managerial load makes it easier for the company to develop and grow.
5. Better control: Decentralisation makes it easier to assess performance at all levels. It is possible to hold particular departments responsible for their outcomes. It is possible to evaluate how each department contributes to the goals of the organisation.