Q2RQ - Horngren'S Financial And Managerial Accounting

Question

List the advantages of decentralization.

Step-by-Step Solution

Answer

Advantages of decentralization:

• Expeditious decision-making
• Satisfaction of human needs
• Good communication 

Step 1: Meaning of Decentralization

In business terms, decentralization refers to the process of delegating the activities among the various departments and personnel of the organization by the authorized sources, groups, or locations.

Step 2: Advantages of decentralization

Decentralization has following advantages:

• Decentralization enables quick decision-making in the organization. 
• It facilitates the management with efficient communication.
• This motivates the human assets by satisfying their needs.