Frequently Asked Questions

What is the purpose of decentralization?

The purpose of decentralization is to create a system that is more secure and efficient by removing the need
for a central authority. Decentralization eases the control of different units and gives each unit independence
of operation, as opposed to centralized standards.

What does decentralization mean in government?

Governmental decentralization can be seen in many areas. It can be an elected official with less power than
the central authority or it can refer to the creation of smaller local governments with more autonomy. The
decentralization process in government is often associated with a shift from a hierarchical, centralized
government to a distributed form of governance.

What is an example of decentralization?

A cost center is an example of decentralization in which authority to track controllable expenses is given to
subordinates in an organization. In a decentralized organization, every department is a cost center. The
departmental managers are responsible for the costs of running their respective areas and generating enough
income to cover those costs.

What is meant by decentralization?

Decentralization is the process of disseminating authority and decision-making roles to middle and lower-
level management offices. A decentralized system can be defined as one in which most decisions are made at
the local level. Decentralization in a company means that authority and decision-making power are distributed
throughout the organization instead of concentrated in a centralized hierarchy.