Question

What are the advantages and disadvantages to decentralization? What are the advantages and disadvantages of centralization? Does one work in one environment better than the other? Please give well thought out responses

Answer 1

Decentralization; The distribution of decision making power to lower management is called as Decentralization.This is way higher than delegation.

Advantages;

*Lessen burden from top executives.

*Development oportunity for managerial personnel.This increases morale of an employee and motivation.

*Efficient output. With the help of delegation it emphasizes care, trust amoung the employee, which in turn increases output.

*Improved coordination.Different operations are coordinated in this decentralised setup.

*Decentralisation facilitate taking up quick decision.As work is delgated and serious party are involved coordinating with each other, which leads to quicker decison.

Disadvantage of decetralisation;

*It incurs more cost. This encourage duplication of functions and system, so would be very costly affair for smaller companies.

*Lack of uniformation.Each manager will work as per his talent level not with policy or standard procedures.

*Workload are not distributed equitably.This leads to some manager with more loads of work compare to other.