Is it possible to have effective overall management in a decentralized company

Managerial Accounting (2nd Edition)

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It is possible to have effective overall management in a decentralized company. Some of the advantages of decentralization are that it can provide for training and for lower level managers to become effective upper level managers. Decentralization encourages participation and accountability. It is flexible and makes it easier to adapt to minor issues and changes. Under this type of management, decision-making is done in a more democratic way and involves more individual participation. It gives managers the freedom to hire experts to best serve their particular areas. It emphasizes bottom-up communication, which can improve service from the customer’s perspective. A policy of decentralization does have its drawbacks. Managers may be less able to respond quickly to major issues and changes. Some costs and assets may be duplicated. Managers goals may not be in line with the goals of upper management. A company may begin to decentralize when one person can’t handle the management of the
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