Important of decentralisation is explained as follows:
(i) Relief to top management: In a decentralized organisation, top managers are not burdened by common day-to-day problems. They have enough time to plan ahead and develop new strategies.
(ii) Develops managerial talent for the future: In a decentralized organisation even lower level managers learn the art of exercising decision making authority. This prepares them for the promotion to the higher levels.
(iii) Quick decision making: In a decentralized organisation, decision making is not restricted in few hands only but decision power is entrusted with all the managers who perform the activities.
(iv) Develops initiative amongst subordinates: Decentralization helps to promote self-reliance and confidence amongst the subordinates. They learn to depend on their own judgement.
(v) Facilitates growth: Decentralization provides greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department. Consequently the productivity levels increase and the organisation is able to generate more returns which can be used for growth and expansion purposes.
(vi) Better control: Decentralization makes it possible to evaluate performance at each level. The departments can be individually held accountable for their results.
