Advantages of Decentralisation
Decentralisation has several advantages. They are:
- Decentralisation relieves the top executive from routine works, and enables them to concentrate on more important works.
- By giving responsibility, authority and initiative to the subordinates, and thereby, widening the scope of their activities, decentralisation contributes to the development of executives or management m the organisation.
- By giving power, prestige and status to the subordinates, decentralisation increases the morale of the subordinates and motivates them to put forth their best.
- By giving authority for decision-making to the lower levels where actions take place, decentralisation facilities quick decisions.
- Under decentralisation, the performance of each unit is judged by the management on the basis of the profitability. This ensures m9f.e, effective control by the management over each unit.
- In a decentralised enterprise, each of the different divisions or departments is made a separate profit centre. This contributes to healthy competition between the different divisions or departments to improve their performance.
- In a decentralised enterprise, the division or departments are independent of one another. This is helpful to the management to experiment with new ideas in one division or depa11ment without adversely affecting the functioning of the other divisions or departments.
- In a decentralised enterprise, the employees have greater opportunity to come into close contact with one another. This contributes to personal intimate relationship between them.
- Decentralisation contributes to the diversification of activities and products.