The advantages of decentralization are discussed here in this article. Decentralization is a complicated word. First, we shall understand the meaning of decentralization. Decentralization refers to a specific type of organizational structure in which decision making and daily management is done by middle and lower-class managers. Earlier, the traditional way was that decisions were made by few people, typically the CEO, board of directors and senior executives and middle and lower class managers followed those rules and arrangements.
Recently there is push towards decentralized organizations in which mid and lower level manager are given more authority for making decision and staff employees feel more involved in decision making process. There are many advantages and drawbacks related to decentralization but we will focus on benefits of decentralization.
10 Advantages of decentralization
So the advantages of decentralization are:-
1. Good authority empowers employees
Employees feel more involved by having more authority for making their own decision, giving them sense of importance and making them feel that they are directly linked towards company good and bad. It gives them offer to use their prior experience, knowledge and implement some their own ideas. Empowered employees are more excited and can finish the task in minimum amount of time.
2. Less burden on centre
Decentralization is the technique used to relieve the burden of daily operation and decision making from the head of business owner or higher order authorities. When the higher authorities allow lower level officers to perform various tasks like hiring new recruits, ordering supplies it enables the higher authorities to free their time which can utilized for making big decision such as rules for company, expansion etc.
3. Emergencies call
A lot of situation arises where higher authorities are not in a position to make decision and the responsibilities comes to mid and low-level officers. A decentralized structure provides a better chance that the organization will maintain self-sufficiency because lower level officers are used for making decisions on their own.
4. Efficient decision making
It is scientifically proven fact that decentralized organizations have faster decision making capability than centralized system. A mid-level manager can make his own decision without going through series of commands of higher officers. He doesn’t need to wait for organization to allow or react for certain decision and situation. Quick responses leads to losing and gaining of customers.
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5. Expansion ease
Expansion of any company is directly related to decentralization of the organization. For creating new units of organization in different place, decentralization allows new unit to act independent entity, meaning it can respond to specific issues easily such as deciding to sell new products that applies to local market etc.
6. Productive work
Our actions can be directed on what is needed to be done and duplicate copies of work should be brought to rest. Due to decentralization, it is easy to contact every worker present their and workflow becomes smooth and efficient. Due to this, people do same work in less time without wastage of resources and energies.
Decentralization allows the mid-authority to define their own workflow among them rather than following the workflow of higher official.
7. Situation friendly
Due to decentralization, it becomes very easy to handle any task or situation in the organization. It is best suited to handle emergency situations such as growing rates, declining prices of product, reducing cost, deal with any government policy or make new offers to customer etc.
It is different than centralization where decisions is given through a individual authority who is ultimately made responsible for everything.
Centralization is inefficient when it comes to make decision as higher officials are not directly related to ground task and only know the statistical values of some work.
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8. Facilitate diversification
The diversification of product, activities and markets etc. is facilitated due to decentralization in the modern world. A centralized organization with authority to top level officers will find it difficult and complex to diversify its product and open an additional branch of manufacture and distribution.
9. Better control and supervision
Decentralization ensures good control and supervision as the officials at lower level have authority to make decision that are apt and independent. They are in position to make correct decision as they have thorough knowledge of every assignment under their control.
In this way, they will get opportunity to improve their talent and managing skills.
10. Satisfaction and dedication
It act as a proper tool for satisfying our basic needs of independence, power, prestige and status. A small level worker is build up to higher authority by satisfaction and as they feel responsible towards company need.
As workers are given authority, they tend to work closely and properly into integrated groups. This improves the morale of the employees as they are getting involved in decision making.
So these were 10 benefits of decentralization and should be implemented to every organization.