Question

Long Answer Type Question:
Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.

Answer 1

Decentralization refers to the dispersal of the decision making power among the middle and lower level managers. It is an optional policy as it depends on the organisation how much power the top level management wants to delegate to the lower levels.

An organisation would choose to be decentralized because of the following importance of decentralization:

1. Develops Initiative among Subordinates: Decentralization helps the managers at the lower levels to take all those decisions, which are for the betterment of organisation, on their own and to develop solutions for solving the various problems they face. This helps in enhancing confidence and self-reliance among the employees.

2. Quick Decision Making: Decentralization promotes independent and quick decision making by subordinates as they are close to the operations and are in constant touch with all activities of their departments. Approval from various levels being not required, decisions can be taken much faster on their own.

3. Relief for Top Management: It relieves the top executives of excessive workload as the common and day to day routines are assigned to the subordinates. The saved time can be utilized by them in making strategic plans and providing direction to the organisation for further growth.