What
are
the
benefits
of
decentralization?
1.
Creates
greater
responsiveness
to
needs
of
a
subunit's
customers,
suppliers,
and
employees
-
Good
decisions
cannot
be
made
without
good
information.
-
Subunit
managers
typically
have
better
information
than
top
management
regarding
local
issues,
reducing
costs,
improving
quality,
and
local
performance.
-
Kodak
uses
decentralization
and
suggests
they
are
benefited
by
an
"increase
in
the
company's
knowledge
of
the
marketplace
and
improved
service
to
customers.”
2.
Leads
to
gains
from
faster
decision
making
by
subunit
managers
-
Faster
decision
making
creates
a
competitive
advantage
over
centralized
organizations.
-
E.g.,
Delegating
decision
making
to
the
sales
force
may
allow
a
firm
to
respond
faster
to
changing
customer
requirements.
3.
Increases
motivation
of
subunit
managers
-Decentralization
=
Creativity
=
Productivity
-Managers
are
more
motivated
and
committed
when
they
can
exercise
initiative.
