Question

What is a decentralized financial systems within health care organizations? discuss your findings, as well as the advantages and disadvantages of such a structure​

Answer 1

Answer:

Decentralization of health systems is a common pillar of health sector reform initiatives and is often viewed as a means to improve efficiency and quality of services as well as promoting accountability and local governance of the health system

Explanation:

advantages

i. Decentralization may be, in part, merely the result of circum­stances (Dale). Centralization enables a competent leader to control work and produce results quickly and effectively.

ii. It helps to coordinate work and put all activities on track. There are certain special circumstances forcing managers to reserve authority and centralize decision-making power.

iii. Actions can be focused on what needs to be done and duplications can be put to rest. It becomes easy to get all units and people do the same thing in the same way at the same time without wastage of resources and energies.

iv. Decentralisation is the best solution to handle emergency situations—such as declin­ing sales, cutting costs, using resources productively, pushing a competitor to the wall, handle policy changes of government etc. Centralization ensures prompt decisions – flowing from one individual who is ultimately made responsible for everything.

disadvantages

Decentralization is not a sure bet. It could prove to be a troublesome exercise if not carried out in a proper way, in the following ways:

1. Conflict:

Decentralization puts increased pressure on divisional heads to realize profits at any cost. This may lead to inter-divisional rivalry leading to bitter fights. Each divisional head might be tempted to build his own empire at the cost of others. Problems of coordination and control may also arise when such ‘mini-companies’ or ‘little empires’ exist within an organisation.

2. Cost:Decentralization results in a duplication of staff effort. To be in­dependent, each division should have access to purchasing, personnel, marketing and other specialists. As a result each division is expected to carry a large group of staff specialists at enormous cost.

3. Some Disadvantages of Decentralization Relate to the Profit-Centre Concept:

Often capable and competent individuals may not be avail­able to run the divisionalised organizations. Freedom of action may lead to diversity of decisions. Many a time the remote control from headquarters may prove to be ineffective as the enterprise grows. In addition, decentralization demands training programmes that may be time-consuming and highly expensive.

Answer 2

Answer:

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