Define decentralisation. State any six importance of decentralisation.
Answer – Decentralisation is systematic dispersal of decision-making authority throughout an organisation, particularly to lower levels. It is an extension of delegation and reflects a policy of giving subordinates greater autonomy. Centralisation concentrates authority near the top; the suitable balance depends on size, competence, risk and circumstances.
Importance
- Develops initiative: lower managers learn to act independently and solve problems.
- Develops managerial talent: decisions provide practical experience for future responsibilities.
- Enables quick decisions: matters can be settled close to the point of action.
- Relieves top management: senior managers can concentrate on strategic matters.
- Facilitates growth: capable units can handle expansion and new activities.
- Improves control: responsibility centres and performance measures help evaluate each unit.
Decentralisation does not mean absence of control; authority must be supported by clear objectives and accountability.