Which of the following are the advantages of decentralization?

(A) It facilitates quick decisions and improves the quality of the decisions.

(B) It provides actual work experience to a large number of middle and lower managers.

(C) It ensures strict control at all levels.

(D) Provides relief to top management.

Choose the correct answer from the options given below:

(A), (B) and (D) only

The correct answer is option 1- (A), (B) and (D) only.

Except (C) It ensures strict control at all levels, all are advantages of decentralisation.

(A) It facilitates quick decisions and improves the quality of the decisions. The management hierarchy can be looked upon as a chain of communication. In centralised organisation because every decision is taken by the top management the flow of information is slow as it has to traverse many levels. Response also takes time. This reduces the speed of decision making and makes it difficult for an enterprise to adapt to dynamic operating conditions. In a decentralised organisation, however ,since decisions are taken at levels which are nearest to the points of action and there is no requirement for approval from many levels, the process is much faster. There are also less chances of information getting distorted because it doesn’t have to go through long channels.

(B) It provides actual work experience to a large number of middle and lower managers- By delegating authority, more managers gain real experience in decision-making and leadership.

(C) It ensures strict control at all levels- This is not typically an advantage of decentralization. In fact, decentralization may lead to less strict or uniform control compared to centralization. Decenrralisation give less control over executives hence greater freedom of action.

(D) Provides 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. Also, personal supervision is generally replaced by other forms of control such as return on investment etc. Decentralisation also leaves the top management with more time which they can devote to important policy decisions rather than occupying their time with both policy as well as operational decisions. In fact decentralisation is greatest when checking required on decisions taken by lower levels of management is least.