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Organising — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesOrganising6 Marks
Question
Explain by giving any three reasons why decentralisation is important in an organisation.
Or
It refers to systematic effort to delegate all authority to the lowest level except that which can be exercised at central points. Name it and explain its two importance.
✓

Answer

The concept referred here is decentralisation.Importance of decentralisation is as follows:
  1. Relief to top management: In a decentralised organisation, the top executives are not burdened by the problems and complexities of administrative details. Therefore, they have enough time to plan ahead, develop new strategies and concentrate on coordination and control.
  2. Improved team work: In a decentralised organisation, managers make special efforts to seek the participation of subordinates in decision-making, open communication and take personal interest in their welfare. These factors lead to superior team work.
  3. Develops managerial talent for the future: When there is decentralisation of authority, the subordinates get an opportunity to take decisions and develop themselves for getting promotion to higher positions in the organisation. This leads to development of future executives.
  4. Quick decision-making: Since decision making authority is entrusted nearest to the point of action, quick decision-making is facilitated. It provides competitive edge to the company.
  5. Develops initiative among subordinates: Managers with greater degree of autonomy take initiative, develop better ingenious ways of doing work thereby creativity and experimentation are encouraged.
  6. Better control: In decentralistion, employees working at different levels take their own decisions and they are personally accountable for their decisions. They cannot pass the blame to their superiors.
  7. Motivation of employees: A decentralised organisation improves motivation of employees because it encourages lower levels to take decisions without seeking approval from higher levels. It gives employees a sense of importance, recognition and responsibility.

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