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Definations of Differentiation

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Definitions of Decentralisation

According to Henry Fayol, "Everything that goes to increase the importance of the subordinate’s role is decentralisation, everything that goes to reduce it is centralisation."
According to Louis Allen, "decentralisation refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central point."
This definition makes it clear that even in decentralisation, delegation to the lowest levels is not complete as the basic functions in the management process are centralized.

level of standardization—both within and across markets—the greater the possible level of global efficiency
Globalization 3.0, major software advances have allowed an unprecedented number of people worldwide to work together with unlimited potential. Advantages / Importance of Decentralization

1. Decentralisation helps to improve the quality of decisions/decision-making at the top level management : Decentralisation of authority among other executives at all levels in the Organisation relieves the top executive of the excessive burden saving his valuable time, which he can devote to more important and long-term problems. This is bound to improve the quality of his decisions regarding such problems.
2. Decentralisation facilitates diversification of activities : It is a matter of common experience that an Organisation with departmentation on the basis of products facilitates diversification of products or market even when the authority is centralized. Decentralisation takes this process a step further. Managers of semi-autonomous product divisions are able to utilise their skills and experienced judgment. This has a bearing on their products and the market. The enterprise also attains maximum possible growth. Decentralisation is beneficial when new product lines or new activities are

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