Question

what is disadvantage of decentralisation of power​

Answer 1

Answer:

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.

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Answer 2

Answer:

Disadvantages of Decentralization

Difficult To Co-Ordinate

While talking about the advantages and disadvantages of decentralization, it is imperative to note that substantial autonomy is enjoyed by every single division. This, in turn, makes it difficult to coordinate the overall activity.

External Factors

The trade union movement, market uncertainties, and government intervention might make it impossible to benefit the most out of decentralization.

Narrow Product Lines

Decentralized product lines need to be adequately broad so that autonomous units can flourish within the same. This might not be of much help in small business houses having narrow product lines. Lower levels in the organization also lack competent managers thus adding to the difficulty quotient.

Expensive

In decentralisation, every employee takes responsibility for the better of the organisation so they work harder to achieve all the organisational objective. In return, they have to be paid more which sometimes proves to be very expensive for the company.