Question

Neeraj Gupta started a company 'YoYo Ltd'. with ten employees, to assemble economical
computers for the Indian rural market. The company did very well in its initial years. As the product was good and marketed well, the demand went up. To increase production the company decided to recruit additional employees. Neeraj Gupta, who was earlier taking all decisions for the company, had to selectively disperse the authority. He believed that people are competent, capable and resourceful and can assume responsibility for effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range with different features

a. Identify the concept used by Neeraj Gupta through which he was able to steer his company to greater heights.
b. Also, explain any three points of importance of this concept.

Answer 1

a. The concept used by Neeraj Gupta through which he was able to steer his company to greater heights is decentralisation

Quotation for decentralisation: Neeraj Gupta, who was earlier taking all decisions for the company, had to selectively disperse the authority.

b. Importance of decentralisation:

1. Initiative: Decentralisation provides managers with the freedom and authority to take their own decisions. In this way, it gives them opportunities to take initiatives. This helps managers to develop self-confidence.
2. Managerial Competence: Decentralisation provides personnel with the opportunity to gain new experience and develop their skills. This helps in improving their competence. In this way, it helps in the development of future managers who can take greater responsibilities.
3. Control: With decentralisation, the performance of various departments can be evaluated in a better manner. The contribution of each department towards the overall objectives can be easily analysed