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Organising — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesOrganising6 Marks
Question
What is meant by ‘decentralisation’? Explain any four points which highlight the importance of decentralisation in an organisation.
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Answer

  1. Decentralisation is delegation of authority throughout the organization. Decentralisation refers to systematic delegation of authority through all the levels of management and in all the departments except that which can be exercised only at central points.
  2. Importance of decentralization,
  1. Develops initiative among subordinates: Decentralisation helps to promote self-reliance and confidence amongst the subordinates. A decentralisation policy helps to identify those executives who have the necessary potential to become dynamic leaders.
  2. Develops managerial talent for the future: Formal training plays an important part in equipping subordinates with skills that help them rise in the organisation but equally important is the experience gained by handling assignments independently.
  3. Facilitates growth: Decentralisation awards greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department and fosters a sense of competition amongst the departments.

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