Question

Which of the following are the few factors that explain why an organisation would choose to be decentralised.

Options

• Initiative

• Managerial Competence

• Control

• All of the above

Answer 1

All of the above

Explanation - 

The following are some of the reasons why a company would opt to decentralise.

1. Initiative : Lower management levels benefit from decentralisation since it allows them to make their own decisions. It provides kids more freedom to make decisions on their own. Furthermore, it instils in them a sense of self-assurance and self-reliance. When power is given to lower-level managers, they learn to confront new difficulties and solve problems on their own. This aids in identifying potential managers who can take the initiative required.
2. Managerial Competence: When authority is delegated to lower-level managers, they are given the opportunity to grow. It allows them to gain experience and, as a result, build the skills and knowledge necessary to meet new problems. Decentralization allows them to demonstrate their abilities and prepare for higher roles. It also aids in the pre-identification of future managers who are well-equipped with the essential talent to handle managerial issues.
3. Control : Decentralization aids in a more accurate assessment of the organization's performance. Decentralization aids in the analysis and evaluation of each department's performance separately. Thus, the amount to which each department has succeeded and their contribution to the organization's overall goals can be clearly assessed.