Question

Explain the benefits to a company of decentralizing its decision-making. (List at least 3)

Also, explain the benefits to a company of centralizing its decision-making. (List at least 3)

Answer 1

Benefits of decentralized decision making

1. Reduce the burden of top management. As the responsibility is shared with the executive so top management is not burden with each and every decision of the organisation. Lower executive can take the decisiona which are not very crucial and important to the organisation.

2. Development of executive. Decentralisation gives responsibility to the lower executive which make them accountable and opportunity to grow themselves which result in development of the executive.

3. Quick decision making. As the executive are authorised to take the decision so they make the decision very quick. There is no need of waiting for the decisions from the top level manager. decentralization brings the decision making process close to the action.

Benefits of centralised decision making in organisation.

1. A clear chain of command. A clear chain of command is followed as everyone knows whom to report and that is a single person, the top level managers. There is no confusion in between the employee as the commands and decisions will be taken by the same person.

2. Improve quality of work. By the help of centralised decision making, the procedure is standardized. It is easy to supervise the work which results into improve in the quality of work. There are supervisor in each department whi take care about the quality of work.

3. Reduce internal conflict. In centralised decision making, only few people at the top level make the decisions, this results in less conflict within the organisation as everyone have to follow the decision of top level manager. As more people will be involved in decision making that will result in difference of opinion and arise of arguments.

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