- 10 Marks
Question
Asanko Ltd is a dry dock company which repairs fishing trawlers. The company has its headquarters in Ghana with subsidiaries in Sierra Leone, Gambia and Liberia. The company has adopted decentralisation policy for its operations.
Required: Explain FIVE (5) reasons which might have accounted for the company’s decision to adopt this policy for its operations.
Answer
Reasons for Adopting Decentralisation
- Quick decision making: There is quick decision making in the decentralised units. This is because the unit or country heads will not require the approval of the headquarters for some decisions to be made.
- Reduction of operational misunderstanding: There will be reduction in operational misunderstanding between the headquarters and the units because there is some sharing of power to manage between the headquarters and the branches in the various countries.
- Better supervision: There is better supervision of subordinates at the country branches. This is because managers at the country branches are closer to their subordinates and as a result will be able to supervise them more closely than they being supervised from the headquarters.
- Improved motivation: Managers at the branches will be motivated to dispense their responsibilities. This is because they will have a sense of ownership and belonging in the operations of the organisation.
- Accountability: Decentralisation ensures high levels of accountability at the branches. This is because managers at the branches will make good decisions in the allocation of resources because they will be called to account for every decision made in terms of resource allocation.
- Greater flexibility: Decentralisation results in greater flexibility. This is because the branches do not necessarily require the approval from the headquarters when certain operational changes are needed.
- Topic: Business and Organisational Structure
- Series: MAR 2024
- Uploader: Theophilus