ADVANTAGES AND DISADVANTAGES OF DECENTRALISING AUTHORITY.
Decentralization is whereby daily operations and decision- making responsibilities are delegated by top management to middle and lower level managers within the organization except that which can only be exercised at central point. For example Olivine industries, it has branches in different towns run by a branch manager who can make certain decisions like staffing and sales promotions. Branch managers are empowered to make on-spot decisions to handle customer problems or complains. They then cascade a certain degree of authority to sales representatives and cashiers at the branch. The need for decentralization is felt when a business grows in its size which necessitates diversification of office activities and has the following advantages:
It gives emphasis on care and caution to work as employees are given a greater responsibility which results in them making quality decisions. Better decisions are made as they are being closer to the scene of action and in a shorter period. This allows the organization to react quickly to situations where fast action is crucial for example when production equipment breaks down and there is need for a supervisor to call in technicians to reduce equipment down time which results in production loses. In cases of emergency such as illness, business trips or where top management has to go on leave, a decentralized structure provides a better chance that the organization will maintain self sufficiency because managers and employees are accustomed to working autonomously.
Employees can be motivated by having a certain degree of autonomy. It makes them feel they have more input in the direction of the organization. Thus it allows them to make better use of the knowledge and experience they have gained. This has a bearing on their products and the market at the same time the enterprise also attains maximum possible growth and morale of employees is increased....
Bibliography: Chris, J. Advantages of a decentralised organizational structure. [Online] Available: http//www.smallbusiness.chron.com/advantages-decentralized-organized-structure-603.html [07 May 2014]
Gauray, A. Decentralization advantages and limitations of decentralisation. [Online] Available: http://www.kaylan-city.blogspot.com/2010/07/decentralisation-adv-and.html. [19 May 2010]
Smith, P.J.; and Cronje G.J. (1997) Management Principles, Zebra Publications, Cape Town.
Stonner, E.D.; and Freeman, R.E. (1992) Management. Prentice-Hall International Inc. USA.
Strydom; J. (2011) Principles of Business Management. Oxford University Press. Southern Africa (Pvt) Ltd.
Please join StudyMode to read the full document