Decentralization:
It is the process of transferring and assigning decision-making authority to lower levels of an organizational hierarchy. The span of control of top managers is relatively small, and there are relatively few tears in the organization, because there is more autonomy in the lower ranks.
Advantages
- Raise morale and promote interpersonal relationships
- Relieve from the daily administration
- Bring decision-making close to action
- Develop Second-line managers
- Promote employee’s enthusiasm and coordination
- Facilitate actions by lower-level managers
Disadvantages
- Top-level administration may feel it would decrease their status
- Managers may not permit full and maximum utilization of highly qualified personnel
- Increased costs. It requires more managers and large staff
- It may lead to overlapping and duplication of effort
There must be a good balance between centralization and decentralization of authority and power. Extreme centralization and decentralization must be avoided.
3 Comments