Decentralisation : A Strength
The McNeil name has been associated with the manufacturing and sale of pharmaceutical products since 1879, when Robert McNeil opened his first retail drug outlet in Pennsylvania. Growing as a producer of prescription pharmaceuticals, McNeil Laboratories, Inc. was incorporated in the U.S. in 1933, and became a member of the Johnson & Johnson family of companies in 1959. Mcneil Consumer Healthcare began operations in Canada in an existing administrative Johnson & Johnson facility in Guelph, Ontario in 1980. McNeil Consumer Healthcare (nonprescription pharmaceutical products) in Guelph, Ontario is member of the Johnson & Johnson family of companies in Canada. An important difference between Johnson & Johnson and most other companies—is the concept of decentralised management. Instead of operating as one large multi-billion dollar corporation, Johnson & Johnson is operated as 190 smaller companies, each focused on a specific medical or product franchise and/or geographic area, with each affiliate generating multiple options for growth. Through decentralisation we combine the advantages of being big with the agility and focus of smaller firms. Decentralisation enables each company to stay close to its customers, maintain short lines of communication with customers and employees, and accelerate the development of talent. The Johnson & Johnson - Merck Consumer Pharmaceuticals company also operates from our Woodlawn Road facility in Guelph.
Which of the following is not an importance of Decentralization?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Increases the amount of direct supervision exercised by a superior over subordinates
Decentralisation means that the authority to take decisions is spread to the lower levels of the organisation, instead of being kept with top management.
Option (1) Develops managerial talent for the future — An importance of decentralisation (Incorrect). Lower-level managers get a chance to take decisions and prove their ability. This builds a stock of trained people for higher posts.
Option (2) Quick Decision making — An importance of decentralisation (Incorrect). Decisions are taken close to where the work is done, without waiting for approval from many levels.
Option (3) Facilitate Growth — An importance of decentralisation (Incorrect). Each unit gets the freedom to work in the way that suits it best, so the organisation can grow.
Option (4) Increases the amount of direct supervision exercised by a superior over subordinates — Not an importance of decentralisation (Correct). Decentralisation gives relief to top management: it diminishes direct supervision, because subordinates are given the freedom to act and decide on their own.
Note: The passage is the NCERT case study ‘Decentralisation : A Strength’, which has been reproduced by NTA in the exam. Even the small boxes in the middle of a chapter come up as exam passages, so read every box in NCERT. NCERT (2026-27 Edition): “Importance … (i) Develops initiative among subordinates: Decentralisation helps to promote self-reliance and confidence amongst the subordinates. …” “(ii) Develops managerial talent for the future: Formal training plays an important part in equipping subordinates with skills that help them rise in the organisation but equally important is the experience gained by handling assignments independently. …” “(iii) Quick decision making: The management hierarchy can be looked upon as a chain of communication. …” “(iv) Relief to top management: Decentralisation diminishes the amount of direct supervision exercised by a superior over the activities of a subordinate because they are given the freedom to act and decide albeit within the limits set by the superior. …” “(v) Facilitates growth: Decentralisation awards greater autonomy to the lower levels of management as well as divisional or departmental heads. …” |