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CMA Foundation · Fundamentals of Business Economics and Management · Organisation Structure, Responsibility, Accountability and Delegation of Authority

Which of the following is an advantage commonly associated with decentralisation rather than centralisation?

Faster decisions at the point of operation is the advantage of decentralisation. Since lower-level managers have authority to decide locally, they need not wait for head office approval. Uniform policies, tight control and lower duplication are generally benefits of centralisation.

  1. AUniformity of policies across units
  2. BFaster decisions at the point of operationCorrect
  3. CTighter control over all activities
  4. DLower duplication of functions

Explanation

Decentralisation lets managers near the operations decide without waiting for approval from headquarters, so decisions are quicker. The other options are typical benefits of centralisation, such as uniformity, tight control and reduced duplication.

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