What are the advantages and disadvantages of decentralization within an organization?
The advantages of decentralization are:
1 . It helps top management recognize and develop managerial talent.
2 . It allows managerial performance to be comparatively evaluated.
3 . It can often lead to greater job satisfaction and provides job enrichment.
4 . It makes the accomplishment of organizational goals and objectives easier.
5 . It reduces decision-making time.
6 . It allows the use of management by exception.
The disadvantages of decentralization are:
1 . It can result in a lack of goal congruence or suboptimization by subunit managers.
2 . It requires more effective communication abilities because decision making is removed from the home office.
3 . It can create personnel difficulties upon introduction, especially if managers are unwilling or unable to delegate effectively.
4 . It can be extremely expensive, including costs of training and of making poor decisions.
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