Importance of decentralization
- Helps to improve the quality of decisions at the top-level management.
- Facilitates diversification of activities.
- Encourages development of managerial personnel.
- Improves motivation within organization
- Makes decision-making quicker and better.
- Provides opportunity to learn by doing.
Limitations of decentralization
- May lead to problem of co-ordination at the level of an enterprise as the decision-making authority is not concentrated.
- May lead to inconsistencies at the organizational level.
- Costly as it raises administrative expenses on account of requirement of trained personnel to accept authority at lower levels.