Advantages of Decentralization

Advantages of Decentralization

  1. It eases the burden of chief executive: too much centralization puts the full weight of problems and pressure from all parts of organization upon the chief executive with the result that he finds no time to plan ahead.
  2. It facilitates diversification: the divisionalised structure facilities diversification of products for markets. Decentralization helps this process a step further.
  3. It provides product and market emphasis: a competitive market requires an enterprise to offer as new a style as low a price and as high a quality as its competitors are able to offer.
  4. Capable managers can be developed: if suitable persons are given management jobs capable managers can be developed. It is only a decentralization organization which can offer such opportunities to the would be managers without involving the company in heavy losses through their mistakes.
  5. Improvement of morale and motivation: research findings show that decentralization stimulates the formation of small cohesive groups. With high degree of participation constant effort to communicate and continuing interest in the welfare of the members of the group these managers( under decentralization) are able to motivate the subordinates extremely well and secure a high degree of morale among them.

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