11 important Factors that Decides the degree of Decentralization

11 important Factors that Decide the Decentralization

According to Haimann the following factors decide the degree of decentralisation;

1. History of the Company:

If a company has grown out of Individual efforts centralisation would be more. On the other hand if the company has grown out of merger or amalgamation decentralisation can be witnessed.

2. General principle of the Management:

If the top managers believe in sharing of power there can be decentralisation. On the other hand if they are autocratic, centralisation’ is possible.

3. Availability of Subordinate Mangers:

If enough subordinate, managers who can discharge responsibilities, are available decentralisation is possible.

4. Dispersion of Operations:

When an organisation is spread out it may involve complexities of operations and it may facilitate decentralisation.

5. Costliness and significance of the Decision:

If the decision is) costly and significant, managers with experience will be allowed to deal with ‘Therefore’, early in a manager’s career authority;’ do decide should involve problems which cannot become too costly to be enterprise. Costliness and significance will be great importance in the manager’s decision of how much authority to delegate’.

6. Uniformity of Policy:

Uniformity of policy leads to centralisation of authority.

7. The size of the Enterprise:

If the enterprise is big, more decision must be made and decentralisation.

8. Dynamics of Enterprise:

If the enterprise is growing fast more decisions are taken and the result is decentralisation.

9. Available controls:

The better the control devices, freer the delegation of authority.

10. Improved morale:

If power is delegated the morale of the subordinate staff is enhanced.

11. Environmental Factors:

Factors like tax, laws government, regulation, etc, have decentralizing effect.