Question

How does decentralization of authority conflict with optimisation

Answer 1

Dear student,

Decentralisation of authority conflict with optimization in following way:

(1) Coordination: As authority is dispersed throughout the organisation,it makes difficult to establish coordination among various subordinates and division, as everyone is authorised for decision making.

(2)Highly qualified personnel:As decision making authority is dispersed in decentralisation so it is crucial to hire highly competent and qualified personnel which ultimately increases the expenses of the company.

(3)Uniform policies not followed: Policies are not followed on uniform basis in a decentralized organisation as middle and lower level management work and frame policies according to their own interest and talents.

(4)Loss of control: As all the decision making authority is dispersed to other level of management by the top level management so it becomes difficult for the top level of management to gather detailed information of the happenings and operations of the organisation,ultimately in this way top management can lose control of the organisation.

(5) Financial burden: Decentralization increases the cost of the organisation as organisation needs to closely monitor the activities of the middle and lower level management to ensure whether decision making authority is being utilized in a best way or not.

Regards
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