This series include Organising function of management for XII Business Studies students for AISSCE preparation.

1. Organising
XII Business Studies
Importance of
Decentralisation
Session : 11 Vikash Residential School

2. Prepared by Pratap Naik
Decentralisation is a philosophy that implies selective dispersal of authority.
 Because it propagates the belief that people are competent, capable and resourceful.
Importance of Decentralisation
Develops Initiative among Subordinates
Develops Managerial Talent for the Future
Relief to Top Management
Facilitates Growth
Better Control
Quick Decision Making
Decentralisation

3. Prepared by Pratap Naik
1. Develops Initiative among Subordinates
 Decentralisation gives freedom to lower managerial levels to take their own decisions.
 Subordinate learn to develop solutions and depend on their judgments for the various problems.
 Thus, decentralisation helps to promote self-reliance and confidence amongst the subordinates.
 This leads to innovation and initiative among subordinates.
2. Develops Managerial Talent for the Future
 Independent handling of assignment and task enhances the skill of subordinates.
 Formal training and experience helps them to deal with various complex situations efficiently.
 Thus, Decentralisation gives subordinates a chance to prove their abilities to be a future manager
for higher job positions.
 Decentralisation also helps in identifying successful and unsuccessful future managers.
Importance of Decentralisation

4. Prepared by Pratap Naik
3. Quick Decision Making
 Decentralised organisation allowed decisions are to be taken nearest to the points of action .
 Thus, there is no requirement for approval from many levels.
 This results in quick decision making.
 There are also least chances of information getting distorted as in case of long channels.
 In centralised organisation every decision is taken by the top level, thus flow of information is slow.
 This also reduces the speed of decision making.
 For centralised organisation, it difficult to adapt to dynamic operating conditions.
Importance of Decentralisation

5. Prepared by Pratap Naik
4. Relief to Top Management
 Decentralisation reduces the amount of direct supervision exercised by a superior.
 Subordinates are given the freedom to act and decide within the limits set by the superior
 Thus Decentralisation relieves the top management with more time.
 Top level management can concentrate more Policy Decisions rather than Operational Decisions.
 It is said that , decentralisation is greatest when
 Checking required on decisions taken by lower levels of management is least.
Importance of Decentralisation
Policy
Decisions
Operational
Decisions

6. Prepared by Pratap Naik
5. Facilitates Growth
 Decentralisation gives sufficient autonomy to all departments.
 This helps to adapt environmental changes innovatively and creatively.
 It also develops a sense of competition amongst the departments.
 Interdepartmental leads to more productivity and more revenue which is essential for growth .
6. Better Control
 Decentralisation makes it possible to evaluate performance at each level.
 Thus, the contribution of each department to organisational objectives can be easily ascertained.
 In order to secure accountability of performance, decentralisation compels the management to
adopt innovative performance measurement systems, such as
o Balance Score Card
o Management Information System.
o Budgetary Control
Importance of Decentralisation

7. Prepared by Pratap Naik
Importance of Decentralisation
 Develops Initiative among Subordinates
 Develops Managerial Talent for the Future
 Quick Decision Making
 Relief to Top Management
 Facilitates Growth
 Better Control
RecapRecap

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Session Complete Vikash Residential School
XII Business Studies