DECENTRALIZATION

Definition
According to Henry Fayol, Everything that goes to increase the importance of subordinates role is decentralization, everything that goes to reduce it is centralization.

Definition
According to Newman, Summer & Warren , Decentralization is simply a matter of dividing up the managerial work and assigning specific duties to the various executive skills.

Advantages of decentralization
1. 2. 3. 4. 5. 6. Reduces the burden on top executives Facilitates diversification To provide product and market emphasis Executive development It promotes motivation Better control and supervision

Limitations of decentralization
1. Not possible to follow uniform policies and standardized procedures. 2. Problem of coordination & control 3. Requires employment of trained personnel

Steps for accomplishing decentralization

Establishing appropriate centralization

Developing managers

Providing for communication & co-ordination

Establishing adequate controls

Providing appropriate dispersion