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'E-Solutions Ltd.', started its operations in the year 2000. At the time of its inception, the company had only ten employees with two departments, a production department and an administration department. The product supplied and the services provided by the company started gaining popularity over the years. The management had faith in the abilities of the employees and thus they allowed them freedom of action. The management recognised that the decisionmakers at different levels of the organisation need to be given more autonomy. They took a policy decision that there will be less control of superiors over subordinates. This increased the role of the subordinates in the organisation and now they were in a position to take numerous as well as important decisions. As a result, the business had diversified into many areas. Presently, it has its operations throughout the country with seven branches overseas. Its organisational structure has now changed into divisional structure and ten thousand people are working with the company.
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Question : 43
Total: 44
Explain five points of importance of the concept identified in (a) above.
Solution:
Importance of decentralisation are as follows:
(i) Relief of excessive workload: Instead, decentralisation confers responsibilities of top management like routine work requiring regular monitoring and crosschecking on their subordinates and can receive periodic updates from them on budgeting and reviewing finances or operations via occasional meetings.
(ii) Prompt decision-making: The decision making process is not just restricted to their superiors but also to their subordinates. This can lead to quick and prompt business decisions on situations closest to the subordinates.
(iii) Facilitates growth: Decentralisation facilitates growth and expansion of a business involved in production or servicing a variety of products/services by giving individual and specialised attention with (specialised) subordinates obtaining the freedom to decide and act (though under the advice of their superiors).
(iv) Better control: Superiors under decentralisation identify some control standards for the subordinates to measure their success in finding/implementing solutions to specific issues or problems during operations. The decisions of subordinates are usually confirmed and conveyed to the superiors implying better control over the operations.
(v) Promotes initiative and creativity: Decentralisation gives an opportunity to subordinates to learn by taking initiatives. This creates a positive working climate where they are given the freedom, to make decision, to use judgement and to act. This may instill competitive atmosphere, better participation and encourages training and development of new ideas, approaches and methods.
(i) Relief of excessive workload: Instead, decentralisation confers responsibilities of top management like routine work requiring regular monitoring and crosschecking on their subordinates and can receive periodic updates from them on budgeting and reviewing finances or operations via occasional meetings.
(ii) Prompt decision-making: The decision making process is not just restricted to their superiors but also to their subordinates. This can lead to quick and prompt business decisions on situations closest to the subordinates.
(iii) Facilitates growth: Decentralisation facilitates growth and expansion of a business involved in production or servicing a variety of products/services by giving individual and specialised attention with (specialised) subordinates obtaining the freedom to decide and act (though under the advice of their superiors).
(iv) Better control: Superiors under decentralisation identify some control standards for the subordinates to measure their success in finding/implementing solutions to specific issues or problems during operations. The decisions of subordinates are usually confirmed and conveyed to the superiors implying better control over the operations.
(v) Promotes initiative and creativity: Decentralisation gives an opportunity to subordinates to learn by taking initiatives. This creates a positive working climate where they are given the freedom, to make decision, to use judgement and to act. This may instill competitive atmosphere, better participation and encourages training and development of new ideas, approaches and methods.
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