What are the advantages of Decentralisation?

The main advantages of decentralisation are as follows:

  1. Relief to top executives– Decentralisation helps in reduction of the workload of top executives. They can devote greater time and attention to important policy matters by decentralising authority for routine operational decisions.
  2. Motivation of subordinates– Decentralisation helps to improve the job satisfaction and morale of lower level managers by satisfying their needs for independence, participation and status. It also fosters team—spirit and group cohesiveness among the subordinates.
  3. Quick decisions– Under decentralisation authority to make decisions is placed in the hands of those who are responsible for executing the decisions. As a result, more accurate and faster decisions can be taken as the subordinates are well aware of the realities of the situation. This avoids redtapism and delays.
  4. Growth and diversification– Decentralisation facilitates the growth and diversification of the enterprise. Each product division is given sufficient autonomy for innovations and creativity. The top management can extend leadership over a giant enterprise. A sense of competition can be created among different divisions or departments.
  5. Executive development– When authority is decentralised, subordinates get the opportunity of exercising their own judgement. They learn how to decide and develop managerial skills. As a result, the problem of succession is overcome and the continuity and growth of the organisation are ensured. There is better utilisation of lower-level executives.
  6. Effective communication– Under decentralisation, the span of management is wider and there are fewer hierarchical levels of organisation. Therefore, communication system becomes more effective. Intimate relationships between superiors and subordinates can be developed.
  7. Efficient supervision and control– Managers at lower levels have adequate authority to make changes in work assignments, to change production schedules, to recommend promotions and to take disciplinary actions. Therefore, more effective supervision can be exercised. Control can be made effective by evaluating the performance of each decentralised unit in the light of clear and predetermined standards. Decentralisation facilitates management by objectives and self- control.

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