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Organising — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesOrganising6 Marks
Question
Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.
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Answer

For an organisation to follow the policy of decentralisation is not compulsory. Even then organisations are following it.Following are the main reasons of it:
  1. Develops Initiative among Subordinates: Under decentralisation, authorities are delegated in large amount. Authority is a kind of power which compels a person to think/ contemplate or to do something new. This inculcates in him the ability to take initiative. Decentralisation not only gives authority but also makes it possible to convert great ideas into valuable creative work.
  2. Develops Managerial Talent for Future: Under decentralisation, decision making authority is given even to the lower level managers. In this way, by getting opportunities to take decisions, knowledge and experience of all levels of managers increases. This develops talent in the managers to bear extra responsibility in the future.
  3. Quick Decision Making: The burden of all managerial decisions is no more confined to some limited people but is distributed among many people. This not only leads to quick decision making but also results in better decision making. All the people are well aware of the problems faced by their unit or division and for this reason they are capable of taking the best possible and quick decisions.
  4. Relief to Top Management: Under decentralisation authority related to take monotonous decisions is delegated to the subordinates. As a result, top management relieves itself from trivial affairs and consequently the workload is quite reduced. This saves their valuable time which is then utilized to brighten the future of the organisation and to establish coordination.
  5. Facilitates Growth: Under decentralisation full liberty is given to the subordinates to take decisions. This situation inculcates a sense of responsibility among the subordinates. Thus, they make effort to achieve/ show better results. This thinking gives origin to departmental competitiveness. In such a situation, everybody tries to perform better than the other. As a result, development of an organisation is made possible.
  6. Better Control: Decentralisation helps to decisively evaluate the work performance at all levels and even makes possible to fix accountability. Contribution of every department for the attainment of an objective can be ascertained. This situation is just like a challenge for every department. Management adopts a good controlling policy to face this challenge.

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