The following are the main objectives which a decentralized system of organization seeks to achieve: To relieve the burden of work on the chief executive. To develop the managerial faculties. To motivate the lower level of workers.

• “Decentralization means to hand over political, financial and administrative authority. from central to local (district/city) governments, so that the government can facilitate and guarantee better public services for the people.

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.

The five principles of decentralization presented in this section, namely simplicity, repetition, transparency, security, and speed were derived from an analysis of several automotive industry use cases: manufacturers, distributors, repair centers and consumers .

The three major forms of administrative decentralization — deconcentration, delegation, and devolution — each have different characteristics. Deconcentration.

Advantages of decentralized organizations include increased expertise at each division, quicker decisions, better use of time at top management levels, and increased motivation of division managers.

Disadvantages of Decentralization:

• Co-Ordination Difficulty: Diverse policies and procedures followed by different units make coordination difficult.
• Waste of Resources:
• Larger Interests of the Enterprise Neglected:
• Emergency Decision not Possible:
• Lack of Qualified Managers:
• Certain Activities Decentralization not Possible:

8 Pros and Cons of Decentralization

• It can help the organization grow overall.
• It encourages accountability and transparency.
• It develops more leaders.
• It breeds innovation and flexibility.
• It isn’t ideal for new organizations.
• It can breed unhealthy competition.
• It duplicates work.

Another problem that persists in decentralized organizations is narrow product lines. Any business with narrow product lines would never be able to take advantage of the decentralization.