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Limitations Of Decentralization

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Apr 2nd, 2012
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Following are the limitations of decentralization.

1. Inconsistency:
Decentralization may bring about inconsistencies in the organization. For instance, uniform procedures may not be followed for the same type of work in various divisions.

2. Increased Administrative Expenses:
Decentralization increases the administrative expenses because it requires the employment of trained personnel to accept authority. The services of such highly paid personnel may not be fully utilized particularly in small organizations.

3. Difficult Autonomation:
Decentralization requires the product lines of the concern to be broad enough to allow creation of autonomous units which is not possible in small concerns.

4. Difficult Coordination:
Decentralization of authority may create problems in co-ordination among the various units.

5. Uncertainties are difficult to Deal with:
Decentralization may not be possible because of external factors. If a company is subjected to uncertainties, it will not be able to meet these under decentralization authority.

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