DECENTRALIZATION English meaning

Decentralization improves the level of job satisfaction as well as employee morale, especially amongst the lower level managers. In such a managerial set-up, only return on equity the top management has the power to make decisions. Decentralization is an effective way to boost the morale and feeling of job satisfaction among employees.

Decentralized computing is a trend in modern-day business environments. This is the opposite of centralized computing, which was prevalent during the early days of computers. This results in most desktop computers remaining idle (in relation to their full potential). A decentralized system can use the potential of these systems to maximize efficiency. However, it is debatable whether these networks increase overall effectiveness. Decentralization in any area is a response to the problems of centralized systems.

To be effective, it requires regular elections, clearly defined jurisdictions and powers, and the appropriate legal, political and functional space. The community-driven development (CDD) and decentralization nexus can empower communities to exert influence over local governance and services. CDD and decentralization are both about empowering people at the local level. Centralization is the method and approach of administration that manages all services and power from the center. This requires the unification of control and activities under a state authority.

• Concepts of decentralization have been applied to group dynamics and management science in private businesses and organizations, political science, law and public administration, technology, economics and money.
• For this, they have to free themselves from the day to day operations.
• Much of the decentralization that has taken place in the past decade has been motivated by political concerns.

Since middle and lower-level management is in charge of everyday operations, it accelerates the process of decision making. The freedom to take prompt decisions further enables them to execute their decisions quickly and effectively. Decentralization is known as the distribution of functions among several units. It is an interconnected system where no single entity has complete authority. It is the architecture in which the workloads, both hardware, and software, are distributed among several workstations.

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Decentralization … confers onto local communities the power… to manage their affairs in order to promote their own development. -Bakary Thaore, Action Collective, (A Burkina Faso Publication on decentralization), October 2001. The trade union movement, market uncertainties, and government intervention might make it impossible to benefit the most out of decentralization. The wider span of management under decentralization leads to fewer hierarchical level. This makes the communication system more efficient as intimate relationships develop between superiors and subordinates.

• Divestment is when the powers are transferred to some voluntary organizations from the government.
• But now he has to plan for decentralization of his organization.
• A database is maintained so as to keep track of all information.
• This helps management to make necessary changes quickly and with more effect, thus facilitating expansion and profitability in a real sense.

Today, we are going to take a look at the basic advantages and disadvantages of decentralization from an organizational point of view. Community/local level checks and balances ensure both community-based organizations and local governments can be held accountable to their respective constituencies. Decentralization also provides a powerful impetus for enhancing the scaling up potential of CDD operations. In its most general term, decentralization refers to the transfer of authority from a central government to a sub-national entity. There are many ways in which a government may devolve power to the sub-national level. Thus, decentralization can be political, administrative, fiscal, or economic.

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If they prefer considering everyone’s decision, they can go for decentralization. Decentralization transfers authority and responsibility of major government functions from central to sub-national governments — including local governments, civil society, and the private sector. Decentralization refers to a specific form of organizational structure where the top management delegates decision-making responsibilities and daily operations to middle and lower subordinates. The top management can thus concentrate on taking major decisions with greater time abundance. Business houses often feel the requirement of decentralization to continue efficiency in their operation.

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This is because he has to focus more on strategical decisions rather than on the day to day operations of the business. Good examples of decentralised business are Hotels, supermarket, Dress showrooms and etc. Because it is not possible for one person to focus on more than 100 branches which have branches throughout the world, take an example of a hotel. Decentralisation is referred to as a form of an organisational structure where there is the delegation of authority by the top management to the middle and lower levels of management in an organisation. The European Union follows the principle of subsidiarity, which holds that decision-making should be made by the most local competent authority.

Advantages and Disadvantages Of Decentralisation

In many cases, these different types of decentralization are carried out simultaneously however, adding to the complexity of the process. Nowadays, technology is advancing day by day and the number of users is also increasing. For the administration of the system, the centralized system is failing to meet all the criteria.

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Administration expenses tend to rise in decentralized enterprises. When it comes to the employment of trained personnel and availability of physical facilities, every separate department tries to be self-sufficient. This, in turn, leads to underutilization of facilities and duplication of functions. Such attributes make decentralization tailor-made only for large organizations. Under decentralization, every single product division attains sufficient autonomy to exercise their creative flair.

Decentralized product lines need to be adequately broad so that autonomous units can flourish within the same. This might not be of much help in small business houses having narrow product lines. Lower levels in the organization also lack competent managers thus adding to the difficulty quotient. Decentralization is a structural set-up, wherein, the power to make a decision is delegated across all levels in an organization.

It is mostly suitable for large scale companies and follows a free and open flow of communication pattern. With the help of decentralization, top management can evaluate the performance of different departments more effectively. Further, it helps them to review and identify the prevailing shortcomings and helps to bring necessary changes to the same. This not just helps to lower the occurrence of operational shortcomings but also offers greater control over each area of operation. Owing to its numerous benefits and positive influence on the company’s performance, business owners tend to prioritize the structure of power delegation. Resultantly, they can make the most of the time and opportunity to focus on the major concerns of their business and also to plan its expansion.

Decentralization unleashes the fullest potential of the organization and can react easily to area-specific requirements. Individuals from each level partake in the decision-making process actively. Additionally, it allows them to reach out to their subordinates as and when required and implement decisions more effectively. Add decentralize to one of your lists below, or create a new one. In 1983, “Decentralization” was identified as one of the “Ten Key Values” of the Green Movement in the United States. Furthermore, it strives to satisfy the varying requirements for participation, independence, and status.

Being entrusted with responsibilities around the department offers them a sense of belonging and further inculcates a team spirit in them. To elaborate, they are responsible for planning, crafting suitable strategies and taking necessary decisions to boost the proficiency at each level and in turn, optimizing the overall productivity of the company. Top executives can focus more on more on the executive level work like planning and decision making if the lower level employees take all the responsibilities on their own. This relieves their workload which eventually is for the greater good of the organisation. Lower level managers can alter production schedules and work assignments with adequate authority. They can even take disciplinary actions and recommend the promotion of their peers.

This helps management to make necessary changes quickly and with more effect, thus facilitating expansion and profitability in a real sense. As the manager at each level is allowed to make decisions pertaining to their department, it offers them more room to bring necessary adjustments through the course of operation. In turn, it not only helps to improve the quality of the department’s performance as and when required but also allows them to come up with suitable solutions to tackle departmental challenges. All of this helps to improve the quality of administration at each level significantly. As employees have the freedom to perform tasks individually, it offers them substantial exposure. In turn, it helps to create a work environment; wherein, employees can hone their executive skills significantly.

As they learn to improve their skills and take responsibility for various tasks, it enhances the overall productivity of the firm. One is devolution of power to spend the money and allotting them with some funds. Another element is to allow the lower levels to collect revenue in the form of taxes and cess charges.

Yes, decentralization is the future of computer networks as there is no central authority. Each user has the same right  Also the security is highly enhanced in this network. The top management may also plan for partial decentralization of the organization. Where the managers themselves can take certain less critical business decisions; the senior management is responsible for making crucial decisions. The top management needs to focus on other strategical issues. For this, they have to free themselves from the day to day operations.