Question

What are the advantages and disadvantages of decentralization in India?

Answer 1

Explanation:

Quick Decision Making

Quick Decision MakingAnother 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......

Answer 2

Answer:

Advantages of Decentralization

1. Diversification of activities

2. Development of the Managerial Personnel

3. Effective Control and Supervision

4. Improvement of morale

5. Satisfaction of human needs

6. Quick and wise decision possible

7. Better utilization of Management

8. Employee Management

9. Increase Social Net Product

10. Reduces the Burden of Top Executives

11. Facilitates Diversification

12. Improves Motivation

13. Secures Better Co-ordination

14. Ensures Effective Control

15. Develops the Quality of Managers

16. Flexibility

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Disadvantages of Decentralization

1. Decentralization makes the utilization of the services of exceptionally talented people. Because of weak financial resources, appointment of such persons may not be possible.

2. Decentralization increases the problems of coordination among the various units.

3. In some cases, decentralization may not be possible at all. External factors make this difficult, such as company wide strikes.

4. It increases the administrative expenses because highly-paid managers have to be appointed.

5. High Cost of Operation: Establishing of various departments and employment of specialists in each department will result in a higher cost of operation.

6. Lack of Uniformity: There shall not be uniformity in policies and actions, since each manager will form his own genius in designing them.

7. Unsuitable for Small Firms: Departmentalization is completely unsuitable for small firms as it involves high operating costs.

8. Reliance on the Manager: Decentralized organization has to place undue reliance on the efficiency of the divisional managers. If they do not have enough skill or competence to take appropriate decisions, the enterprise has to incur heavy losses due to their faulty decisions.

9. Self Centered Attitude: Each department will tend to be self centered ignoring the broader interests of other departments and that of the entire firm.

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