What are the advantages and disadvantages of Decentralization?

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Where an organization has its plants and offices at different locations, centralization of office services cannot be practiced. In such cases, office activities have to be decentralized for their efficient performance.

For example if the operations relating to handling of mail are performed by each department separately it will be said that mail handling is decentralized.

Advantages of Decentralization

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Centralization is neither possible nor desirable for all type of activities. It can be better performed departmentally because of the following advantages:

1. Secrecy of departmental affairs is well maintained.

2. Delay in performing the operation is avoided because it is performed at the department where it is needed.

3. Staff attached to the department develops a sense of loyalty to it, and also develops personal interest in the work.

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4. Since a worker is working, in a functional department, work can be performed promptly.

5. Departmental employees are conversant with the problems of the department and have knowledge of technicalities of the department. Therefore staff can perform the work more quickly and in a better way.

Disadvantage of Decentralization

Disadvantages of decentralized arrangement are as follows:

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1. The total workload of the office cannot be distributed among the personnel of different departments.

2. The quality of work may be poor because of lack of specialization and specialized machines.

3. There will be duplication of efforts, equipment’s and machines etc., this leads to uneconomical operations.

4. There may not be uniformity of office procedure followed in different department.

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5. Standardization of the office procedure and equipment is not possible. The work may be done in different departments in different way and with different equipments.

6. Decentralization creates problems of co-ordination of work among the different departments.

Complete physical centralization or decentralization is neither feasible nor desirable in a modern office of a large scale business. Theoretically, centralising the office work is desirable because it fixes responsibility under a capable executive, avoids duplication and permits better supervision with a more even distribution of the individual work load.

In practice, the centralization is not practicable in pure form. Office work is made up of a series of different activities such as filing, mailing, accounting etc. Again, some firms may have plant at one place; the others may have throughout the country. In some concerns there is greater volume of work as compared to others.

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With all those variations the question of centralization or decentralization tends to become an individual problem for each firm. Therefore, common and routine office services filing, duplicating typing etc. are centralized in the General Office.

While separate staff is provided for individual departments for the performance of those activities which cannot be centralized. A co-ordination of the activities of the functional department is also affected by the General Office.

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