A decentralised firm evaluates performance at each level and holds each department accountable for its own results. Feedback from all levels helps it to analyse variances and improve operations.
Which importance of decentralisation is shown here?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Better control
Option (1) Better control — Correct. Decentralisation makes it possible to evaluate performance at each level and hold each department accountable for its results. Feedback from all levels helps to analyse variances and improve operations. This is the firm in the question.
Option (2) Relief to top management — Incorrect. Here top management gets more time for policy decisions and less direct supervision. The question is about measuring results.
Option (3) Quick decision making — Incorrect. Decisions are taken nearest to the points of action without approval from many levels, so they are faster. The question says nothing about speed.
Option (4) Develops initiative among subordinates — Incorrect. Freedom to decide builds self-reliance and confidence in subordinates. The question is about checking performance.
NCERT (2026-27 Edition): “Importance … (vi) Better control: Decentralisation makes it possible to evaluate performance at each level and the departments can be individually held accountable for their results. The extent of achievement of organisational objectives as well as the contribution of each department in meeting the overall objectives can be ascertained. Feedback from all levels helps to analyse variances and improve operations. …” |