DECENTRALIZATION

 

Advantages

    1. Lower-level managers can react more quickly to problems or changes in operations.
    2. Lower-level managers are closer to the customer and more responsive to the customer's needs.
    3. The operation provides a better training ground for managers.
    4. Delegation improves employee morale.
    5. Top management is free to devote time to strategic planning.

Disadvantages

    1. Assets and operating costs are duplicated (e.g., each division has its own administrative staff).
    2. Managers may pursue their own goals, interests