Statement I: In general, small organisations have more decentralisation than large organisations.
Statement II: Giving panchayats more powers to decide and spend funds granted to them by the government is an example of decentralisation at the national level.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Statement I is incorrect but Statement II is correct.
Statement I: In general, small organisations have more decentralisation than large organisations. — Incorrect. The statement is reversed. Decentralisation means spreading decision-making authority among more than one person. In general it is the large organisations that have more decentralisation.
Statement II: Giving panchayats more powers to decide and spend funds granted to them by the government is an example of decentralisation at the national level. — Correct. Panchayats now decide and spend funds for the welfare of villages. Authority has moved from the government down to these local bodies, so this is decentralisation at the national level.
NCERT (2026-27 Edition): “(viii) Centralisation and Decentralisation: The concentration of decision-making authority is called centralisation whereas its dispersal among more than one person is known as decentralisation. According to Fayol, “There is a need to balance subordinate involvement through decentralisation with managers’ retention of final authority through centralisation.” The degree of centralisation will depend upon the circumstances in which the company is working. In general large organisations have more decentralisation than small organisations. For example, panchayats in our country have been given more powers to decide and spend funds granted to them by the government for the welfare of villages. This is decentralisation at the national level.” |