Advantages of Decentralization of an Organization

Decentralization is a must for large scale organization cause there are lots of advantages of decentralization of an organization which is described below:

Advantages of Decentralization of an Organization

Any program for decentralizing authority must reflect principles of delegation if practical pitfalls are to be avoided. There are, in addition, several other matters to be considered. The widespread practice of decentralization in recent years has taught important lessons.

Strong forces favor the practice of decentralization. The nature of organized effort requires the Eco-ordination of people at every level, and most of the managers responsible for co-ordination are employed at middle and lower organization levels; they cannot function without the authority to manage.

The growing size of the average organized activity requires an increasing number of managers. And while enterprises do not decentralize in order to develop managers, it is nevertheless quite true that these will not be developed internally unless they have an opportunity to exercise authority.

Moreover, the presence of large numbers of well-educated and ambitious young people in an enterprise is a steady pressure on top managers to decentralize.

Advantages of Decentralization of an Organization
Advantages of Decentralization of an Organization

Decentralization of authority helps train up managers.

At the same time, extensive decentralization is not to be blindly applied. In many organizations, the size and complexity of operations do not require it. Decentralization is not without cost, even in larger companies.

In addition to the dangers of non-uniform policy and the problems of control, there are often real financial costs. As authority is decentralized, managers become more and more like independent operators of small businesses.

They may acquire their own accounting force, statisticians, and engineering staff. These people man y soon be duplicating specialized services of the top company organization.

Decentralization has to be enforced after a careful analysis of the costs and benefits involved.

Perhaps the main problem of decentralization is the loss of control. No enterprise can decentralize to the extent that its existence is threatened and the achievement of its goals is frustrated.

If organizational disintegration is to be avoided, decentralization must be tempered with selective centralization of certain areas of vital major policy.

Decentralization must not lead to a loss of control.

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