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Advantages and Disadvantages of Decentralization
In an organization, centralized way of making a decision entails less autonomy to everyone except the central leadership. In contrast, decentralization involves delegation of responsibility and the associated decision-making powers across various levels in the organization. Let us discover the pros and cons of this concept.
A central command structure derives from an autocratic style of management. Autocracy is not necessarily an intention and could be incidental. For example, typically start-ups and business that have just been founded are naturally autocratic with the founding members primarily running the show. Gradually, as the business grows and the headcount expands, the …show more content…

The adoption of organizational standards and best practices is also facilitated by a decentralized setup. Transparency in process ensures that it is easy for the various local teams to emulate and adopt the methods and processes that brought success to a team located elsewhere.
One of the major advantages of decentralized way of taking decisions is witnessed during a sudden change in the local business environment such as the onset of recession or currency devaluation, etc. Businesses are able to respond and adapt quickly to these changes when authority is decentralized.
Retail businesses like Walmart and hotel chains often benefit from having a decentralized style of management. Businesses, where quick decisions amidst fast-paced changes in environment are the order of the day, stand to benefit from decentralization.

Disadvantages of Decentralization

Too much emphasis on localized way of taking decisions may end up blurring the bigger picture. As you go down the corporate ladder, employees seem to lose sight of the organizational vision.
A highly decentralized organization can be the battleground for unhealthy competition between local managers leading to lack of co-operation and coordination. As a result, interdependent functions may suffer and resolving interdepartmental conflicts is difficult when authority has been delegated. In addition, there is costly duplication

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