Difference between decentralisation and decentralisation of power
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In comparing decentralization or devolution with federalism it can be observed that there is a fundamental difference. Decentralisation is devolution of powers by the central authority to lower levels. The central authority may withdraw the devolved powers at will.
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Advantages of Decentralisation
Motivation of Subordinates
Decentralization improves the level of job satisfaction as well as employee morale, especially amongst the lower level managers.
Furthermore, it strives to satisfy the varying requirements for participation, independence, and status. Decentralization also promotes a spirit of group cohesiveness and spirit.
Growth and Diversification
Under decentralization, every single product division attains sufficient autonomy to exercise their creative flair. In this way, the top-level management can create healthy competition amongst different divisions.
While carrying out a discussion on the advantages and disadvantages of decentralization, it is imperative to note that it aids subordinates in exercising their own judgment.
They even develop managerial skills and help in solving the succession problem which ultimately ensures the growth and continuity of an organization.
Quick Decision Making
Another important pointer in the advantages and disadvantages of decentralization is that decisions are taken and executed by authorized personnel. This, in turn, results in faster and accurate decisions which are well aware of the real scenario.
Efficient Communication
The wider span of management under decentralization leads to fewer hierarchical level. This makes the communication system more efficient as intimate relationships develop between superiors and subordinates.
Ease of Expansion
Decentralization can add inertia to the expansion process of a growing business. This might often result in the opening of new business units in varying geographical locations.
Decentralization unleashes the fullest potential of the organization and can react easily to area-specific requirements.
Better Supervision And Control
Lower level managers can alter production schedules and work assignments with adequate authority. They can even take disciplinary actions and recommend the promotion of their peers.
This, in turn, leads to greater efficiency in supervision. Performance evaluation of each decentralized unit helps in exercising adequate control.
The Satisfaction of Human needs
Decentralization serves as an important tool for satisfying our basic need of independence, power, prestige, and status. A cadre of satisfied manager is build up by this satisfaction as they feel responsible towards the company’s betterment.
Relief to top executives
Top executives can focus more on more on the executive level work like planning and decision making if the lower-level employees take all the responsibilities on their own. This relieves their workload which eventually is for the greater good of the organisation.
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