Decentralization Definition
Decentralization is an organizational system in which daily tasks are given to middle and lower-level subordinates by senior management. This gives the top management more time to focus on making big decisions.
Ever wondered about dispersing your critical business operations among everyone in your workforce? If not, you should be. There are multiple advantages you can acquire by doing so. For the uninitiated, this process is termed decentralization.
Let’s dive in and understand decentralization more clearly!
Here, we will discuss:
Understanding Decentralization in Management
Decentralization in management means distributing critical processes including the power of decision-making among the different levels of management in a company.
When powers, functions, and responsibilities are evenly assigned to everyone, an organization gets several advantages. We will also talk about them in the upcoming section!
Importance of Decentralization
Here are the top two reasons why decentralization is important for all businesses:
Encourages Everyone to Take Charge:
Decentralization empowers leaders at lower levels to make decisions that are good for the organization. They handle all problems on their own and come up with solutions to the problems they face.
Decentralization gives everyone a chance to show what they can do by letting them do different jobs on their own time. This helps develop future managers. Giving them this much freedom to make choices helps them get more involved at all levels.
Take the Burden Off Top Management:
It frees up the higher management from extra work because their regular plans are taken care of by their subordinates. They can use the time they save to make important plans and give the organization advice for further growth
Advantages of Decentralization
There are many but here are the top advantages of decentralization you must be aware of:
Fastens Decision-Making:
Decentralization allows every individual in a workplace to be on the same page. This, in turn, makes the whole decision-making process easier and faster.
Empowers Workforces:
Decentralization can also empower workforces as they get the autonomy to do things and solve several challenges on their own.
Improves Management Skills:
The process also gives new opportunities to learn and grow. As a result, you get a wide pool of the right employees to pick for promotion.
Relieves Higher Authority:
Decentralization saves a large chunk of time for higher management as well and there is no need to watch and supervise employees to a greater extent.
Grows Business:
When employees at every level are working independently and higher management is concentrating on the right things, the business automatically grows and flourishes along the way.
Enhances Overall Control:
Through decentralization, you can effortlessly measure the performance of every department. This way, you can facilitate accountability, which eventually results in better control and improved efficiency.
Improves Communication:
The process also streamlines the entire communication method and promotes better relationships across the workplace.
Boosts Morale:
When employees at every level are treated and assigned tasks equally, they will feel considered. Their increased morale will always motivate them to put their best foot forward for the organizational goals.
Disadvantages of Decentralization
Now that you know the advantages, let’s talk about a few disadvantages as well:
Not Easy to Coordinate
Decentralization gives a lot of freedom to every single individual in the workplace. Sometimes, such an extent of autonomy makes it difficult for the higher management to carry out things faster while ensuring everyone remains on the same page.
More Follow-Ups
When higher management distributes all the operations among departments, they will have to follow up with each of them on a regular/frequent basis to avoid any delays. Fortunately, this issue can be easily resolved by investing in one of the simplest HRMS software.
A Bit Expensive:
When you decentralize your workforce, every working individual in your company will be working a little more than earlier to reach the organizational goals. In such a scenario, employees can request more pay. This is certainly the primary reason why most small businesses and startups hesitate to go for decentralization.
There you go!
Now that you know everything about decentralization and how it can benefit your organization, you too should give it a try at the earliest.
HROne can certainly help you to track the performance of everyone along the journey.
FAQs
What are the four benefits of decentralization?
The four benefits of decentralization are the distribution of administrative burden, improved productivity and results, saved time for higher management, and increased ideas and flexibility.
What is the purpose of decentralizing authority and decision-making?
Decentralization makes the leadership in an organization more effective and efficient. When an organization decentralizes, the top leaders are free to make the most important choices. Leaders who are involved on the junior level also get a chance to grow in the long run.
How does decentralization differ from centralization?
Centralization and decentralization are two ways that an organization can work. In centralization, the people at the top management make the decisions. In decentralization, they spread the power to make decisions across the organization.