According to Fayol, the concept of decentralisation is needed to :

Balance subordinate involvement with Managers

The correct answer is option (2)- Balance subordinate involvement with Managers.

According to Fayol, the concept of decentralisation is needed to Balance subordinate involvement with Managers.

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.