Consider the following statements about the importance of decentralisation:
(A) Decentralisation helps to identify those executives who have the necessary potential to become dynamic leaders.
(B) Decentralisation creates a reservoir of qualified manpower who can fill more challenging positions through promotions.
(C) Under decentralisation, personal supervision is generally replaced by other forms of control such as return on investment.
(D) Decentralisation fosters a sense of cooperation amongst the departments, which raises productivity levels.
(E) Decentralisation is greatest when checking required on decisions taken by lower levels of management is greatest.
How many of the above statements are correct?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Three
(A) Decentralisation helps to identify those executives who have the necessary potential to become dynamic leaders. — Correct. When lower managers decide for themselves, those with the potential to become dynamic leaders come to notice.
(B) Decentralisation creates a reservoir of qualified manpower who can fill more challenging positions through promotions. — Correct. Handling work independently gives managers experience, so a reservoir of qualified manpower is ready for promotion.
(C) Under decentralisation, personal supervision is generally replaced by other forms of control such as return on investment. — Correct. Subordinates are free to act within set limits, so direct supervision lessens and measures like return on investment take its place.
(D) Decentralisation fosters a sense of cooperation amongst the departments, which raises productivity levels. — Incorrect. Decentralisation fosters a sense of competition. Each department tries to outdo the others, and that raises productivity.
(E) Decentralisation is greatest when checking required on decisions taken by lower levels of management is greatest. — Incorrect. It is the other way round. Decentralisation is greatest when checking on lower-level decisions is least.
NCERT (2026-27 Edition): “Importance … (i) Develops initiative among subordinates: Decentralisation helps to promote self-reliance and confidence amongst the subordinates. This is because when lower managerial levels are given freedom to take their own decisions they learn to depend on their own judgment. It also keeps them in a state wherein they are constantly challenged and have to develop solutions for the various problems they encounter. A decentralisation policy helps to identify those executives who have the necessary potential to become dynamic leaders.” “Importance … (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. Decentralisation gives them a chance to prove their abilities and creates a reservoir of qualified manpower who can be considered to fill up more challenging positions through promotions. …” “Importance … (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. 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.” “Importance … (v) Facilitates growth: Decentralisation awards greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department and fosters a sense of competition amongst the departments. …” |