IMANET Exam CMA Topic 5 Question 48 Discussion

Decentralization is beneficial because it creates greater responsiveness to the needs of local customers, suppliers, and employees Managers at lower levels are more knowledgeable about local markets and the needs of customers, etc. A decentralized organization is also more likely to respond flexibly and quickly to changing conditions, for example, by expediting the introduction of new products. Furthermore, greater authority enhances managerial morale and development. Disadvantages of decentralization include duplication of effort and lack of goal congruence.