Write the factors influencing the degree of decentralization?

Write the factors influencing the degree of decentralization?

First, need to understand what is the meaning of Decentralization?

Decentralization means to transfer the power or functional authority for decision making to their lower levels of the organization which would be Head of a particular department and mangers of the particular domain which would be Programme Manager/Finance Manager etc.

Assign of particular work can understand it to lead or delegation to move forward to particular authority as per the organizational structures and it has been decided by the organization’s management authority.

As stated by H.Koontz and O’Donnell, the factors which govern the policy of the management can be enumerated as follows:

So, now we need to discuss what is the factors are which influencing degree of decentralization which would be as:-

  1. Cost Factors:- This is the most important factor influencing degree of decentralization, now the question has been arisen why? Because of if the organization want to take a decision which involves the heavy cost of investment so in this sense decision cannot be delegated or decentralized because If anything goes wrong, the organization may be suffered an enormous loss. Here we may take the example of a purchase of capital goods i.e. Procurement of Machinery or equipment which needs to install in a particular factory for the making of some product, so this decision should be taken by the organization’s management the committee can not be delegated on the subordinate shoulder’s.

  2. Uniformity of Policy:- If we talked about the Uniformity of the organization’s policy, place the degree of decentralization.  If an organization want to keep uniformity in their policy and it should be consistent, so in this situation decentralization is not possible because we can see that different habits of individual who are working in an organization with different talents.

  3. Economic Size:- If the business unit has a larger size and it has a different business unit with the different department so the decentralization would be preferred for large units and it would be a help for the top management to be concentrating on the crucial matters of the business.

  4. Management Philosophy:- The philosophy of the executive also, influence the extended support of decentralization. If the organization’s individual or management believe and have the faith in decentralization so it would be successful or prevail in the opposite, they have no faith in this policy due various factors so the centralization will prevail.

  5. Availability of Managers:- it means that shortage of competent managers also limits the extent of decentralization. It has been seen that when there are a scarcity of good managers so there would be a tendency for centralization has been followed if the availability of managers are available in adequate number than decentralization would be easily practicable because they perform their obligations as per the authority delegated.

  6. Control Techniques:- If the organization has sufficient control techniques on their individual and other factors which can be the influence the business of any enterprises, so decentralization is possible. If an organization has sufficient control over how to measure the performance of the subordinate and how to do the correct their action so it would be easy for decentralization in the absence of controlling so the power would or tendency would go towards the centralization.

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Good Bless You!!

Nadeem Khan
M. Com, M.B.A.
Mail - ndmk1338@gmail.com

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