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Questions
Answer the following question.
With the help of any four points, explain the importance of 'Decentralisation' in an organisation.
Answer the following question.
State any three points that highlight the importance of decentralization in an organization.
Solution
Decentralisation refers to the delegation of authority and power to the lower level in the hierarchy. It is optional in the sense that it is up to the organisation to decide that how much authority and power it wishes to delegate to the lower levels. The following points explain why an organisation would choose to be decentralised:
1) Initiative: Decentralisation provides managers the freedom and authority to take their own decisions. In this way, it gives them opportunities to take initiatives. This helps managers to develop self-confidence.
2) Managerial Competence: Decentralisation provides personnel opportunity to gain new experience and develop their skills. This helps in improving their competence. In this way, it helps in the development of future managers who can take greater responsibilities.
3) Control: With decentralisation, the performance of various departments can be evaluated in a better manner. The contribution of each department towards the overall objectives can be easily analysed.
4) Active Decision Making: Decentralisation enables decision making at the nearest point of action. This ensures quick decision making.
5) Growth: With decentralisation, the responsibility is passed on to the lower levels in the hierarchy. This motivates them to work to their best, improving their competence and efficiency. Accordingly, overall performance and growth of the organisation are enhanced.
6) Reduced Workload of Top Managers: With decentralisation, part of the responsibility of top-level managers is passed on to the lower management. Accordingly, the top-level managers can focus on other priority areas, while the lower-level managers handle routine work.
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RELATED QUESTIONS
Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.
The form of organisation known for giving rise to rumours is called ____________.
Decentralisation would benefit the organisation in which of the following manner.
In ______ authority remains concentrated only in few hands at the higher level of management.
In ______ authority is delegated to lower levels of management.
Jojo and Jojo is a company known for its consumer business of baby oil and bandages, but many people do not know that the company also runs a medical device and diagnostics business, as well as a pharmaceutical company. With more than 1,80,000 employees worldwide the company has chosen to share decision making authority with lower levels and place it nearest to the point of action. Therefore the response does not take time. This propagates the belief that people are competent, capable and resourceful who can get a chance to prove their abilities. And enables the company in identifying those executives who have the necessary potential to become dynamic leaders, so that the checking required on decisions taken by lower levels of management is the least. This makes it possible to evaluate performance at each level and each department can be individually held accountable for their results. By quoting the lines given above identify and briefly explain the benefits of the concept discussed above.
