15.11 BENEFITS OF DECENTRALISATION Decentralisation and centralisation both enjob certain benefits and corresponding defects. Some of
the advantages of decentralisation are as follows.
1. Relieves Higher Executives: A decentralised organisation structure reqires delegation of authoirty
which relieves the top managers of their routine work. This is an answer to the problem of expanding
the size of a business. Top executives can concentrate more on important decisions relating to
planning for the future whilst delegating the operating decisions to self-contained units with competent
managers in charge of each such unit.
2. Facilitates Managerial Development: It encourages the development of generalists, facilitating
succession into the position of general managers. Expansion of business requires the production of
the generalist type of managers who can co-ordinate the several activities and perform the managerial
function of planning, organising, staffing, motivating and controlling.
3. Fasters co-ordination: It results in the promotion of intimate personalities and relationships which
result in greater employee co-ordination and enthusiasm. here greater co-ordination is secured at
divisional levels where all the activities necessary are grouped.
4. Facilitates Control: The profit centre concept can be used for controlling divisional operations by
measuring performance against the standard of profits generated by such divisions. The divisional
manager’s efficiency can be evaluated in terms of the returns on investment concept. In this way,
competition can be fastered among the divisions.
5. Encourages greater Efficiency: The competitive atmosphere inculcated by the profit center concept
increases the efficiency of the divisions. Besides, trouble spots can be located and remedied more
easily, which also results in an increase of efficiency.
