Decentralization is a form of organizational structure where authority is delegated by the top management to the middle and lower levels of management in an organization. In other words, it is the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central points. The basic idea behind decentralization is to share power between different levels of government or management. Decentralization has several advantages, including:
- Administrative development: Decentralization process questions the managers judgement and techniques, which grows confidence, encourages self-reliance, and makes them a good decision-maker resulting in the development of the organization.
- Better control: Decentralization assesses and reviews the performances of every department and provides them with an extensive point of view of their work.
- Boosts morale: Decentralization is an effective way to boost the morale and feeling of job satisfaction among employees.
However, decentralization also has some disadvantages, such as:
- Lack of coordination: Decentralization can lead to a lack of coordination between different departments or levels of management.
- Difficulty in control: Controlling is the biggest challenge of decentralization, and balanced-out management and scorecards are being developed.
In India, decentralization refers to the process where power is taken away from central and state governments and given to the local bodies.
