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Neeraj Gupta started a company 'YoYo Ltd.' with ten employees, to assemble economical computers for the Indian rural market. The company did very well in its initial years. As the product was good and marketed well, the demand went up. To increase production the company decided to recruit additional employees. Neeraj Gupta, who was earlier taking all decisions for the company, had to selectively disperse the authority. He believed that people are competent, capable and resourceful and can assume responsibility for effective implementation of their decisions. This paid off and the company was not only able to increase its production but also expanded its product range with different features.
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Question : 20
Total: 39
Also explain any three points of importance of this concept.
Solution:
Importance of decentralisation is as follows:
(i) Develops initiative among subordinates: Decentralisation gives individuals an opportunity to learn by doing. It enhances their morale and they feel highly motivated. It promotes self-reliance, confidence and promotes a positive work environment with greater freedom.
(ii) Develops managerial talent for future: Decentralisation provides a better means to develop as it gives them a chance to take decisions, exercise judgement and perform the activities of top level management.
(iii) Facilitates growth: Under decentralisation, managers enjoy considerable freedom to manage the affairs of their departments! Each department puts its best efforts hence overall productivity increases and this facilitates the growth of organisation.
(i) Develops initiative among subordinates: Decentralisation gives individuals an opportunity to learn by doing. It enhances their morale and they feel highly motivated. It promotes self-reliance, confidence and promotes a positive work environment with greater freedom.
(ii) Develops managerial talent for future: Decentralisation provides a better means to develop as it gives them a chance to take decisions, exercise judgement and perform the activities of top level management.
(iii) Facilitates growth: Under decentralisation, managers enjoy considerable freedom to manage the affairs of their departments! Each department puts its best efforts hence overall productivity increases and this facilitates the growth of organisation.
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