Benefits-Drawbacks

 What Is Decentralization ?

Decentralization is a type of organization set up in which authority and power is delegated to the middle and lower level management. It is just opposite of centralization where decision making authority is reserved in the top management. In this structure departmental heads, branch managers, section officers etc. can make routine decisions without consulting higher level managers. It is suitable for large sized and complex types of organizations because single management or authority cannot manage entire organizational activities.

Benefits Or Advantages Of Decentralization

Some of the notable advantages of decentralization can be expressed as follows:

1. Decreases The Workload Of Top Authorities

One of the main advantages of decentralization  is that it reduces the work burden of  top management because some of the managerial responsibilities, authority and power are delegated to the lower level authorities. So, it helps to minimize the load of top authorities.

2. Quick And Better Decision Making

In this type of organizational setup, decision making authority is delegated to the departmental heads who are closer to the level of operation. It helps to make quick and wise decisions. Prompt and better decision making helps to cope with the situation and solve the problems wisely and quickly. 

3. Facilitates Specialization

Highly qualified, skilled, experienced and specialist personnel are appointed as middle and lower level managers to manage and control different branches, departments and units. So, decentralization brings specialization in the organization.

4. Suitable For

This organizational setup is appropriate for the following types of organizations:

* Having large volume of production

* Organizations with several functional units and departments

* Organizations having large number of staffs

* Large sized organizations with adequate resources

5. Increased Motivation And Satisfaction

It gives freedom to the middle and lower level managers and subordinates to make decisions. It helps to enhance skills, efficiency and potential of the subordinates. It provides the opportunity for growth and development. Therefore, decentralization increases motivation, morale and job satisfaction.

6. Increased Productivity

Because of specialization, increased motivation and high employee morale, it helps to improve employee performance and operational efficiency. Better performance and high efficiency leads to increase in the productivity of the organization.

7. Better Supervision And Control

In decentralization, subordinates and supervised and controlled by the concern managers or departmental heads. Lower level managers have full authority to monitor and control their immediate subordinates. Therefore, it is possible to maintain better discipline and control in the decentralized organization.

Drawbacks Or Disadvantages Of Decentralization

Some of the major disadvantages of decentralization can be expressed as follows:

1. Complex And Expensive

This structure is more complex than centralization because of different branches, departments and different levels of management. It requires more capital and operational costs to manage decentralized organizations because of more operational activities, more employees and complex design. So, it is complex and expensive organizational setup.

      Also Read: 

Advantages And Disadvantages Of Centralization

Difference Between Centralization And Decentralization

2. Not Suitable

Decentralization is not appropriate for following types of organizations:

* Small organizations having limited volume of production

* Organization having less numbers of employees

* Organizations with less functional units

* Not suitable for specialized services

As we know that decision making power is delegated to the middle and lower level authorities in decentralization. If lower level managers are not capable of making wise decision, it may increase the risk of mismanagement and organization may have to bear huge loss.

4. Lack Of Coordination

Another disadvantage of decentralization is poor coordination. It is very difficult to maintain proper coordination between different functional areas and different levels of management because of its complexity. Due to the lack of coordination, there is a chance of conflict, misunderstanding and duplication of effort.

5. Communication Problem

Because of the coordination problem, it is difficult to establish better communication among departments, managers and subordinates in the organization. Lack of communication may create confusion in the workplace. Poor communication may hamper the efficiency and productivity of the firm.

Pros And Cons Of Decentralization In Short

Pros:

- It minimizes the burden of the top executives because responsibilities and roles are dispersed

- It promotes specialization, growth and diversification

- It is appropriate of large organizations with more resources and various operations

- It improves employee motivation and morale

- It facilitates prompt decision making

- It ensures the maintenance of better supervision, discipline and control

Cons:

- It is complex and costly structure

- It is not suitable for small firms with limited activities and resources

- It lacks proper coordination

- There is a possibility of conflict, misunderstanding and communication problem in the organization

- It lacks uniformity

 What Is Centralization ?

Centralization is a traditional type of organization set up in which power and authority such as decision making, planning, policy making, supervision, direction, resource allocation etc. are exercised by the higher level management. It is commonly practiced by small organizations having fewer resources, finance and employees. Managerial activities are handled by superiors and other members (lower level managers and subordinates) are responsible for operating activities.     

Benefits Or Advantages Of Centralization

Some of the notable advantages or centralization are as follows:

1. Simple Structure

This organizational structure is easy to set up and understand. Roles and responsibilities of each member is clearly defined and the subordinates are accountable for only one boss which helps to eliminate confusion, misunderstanding and duplication of work.

2. Cost Efficient

Centralized organizations requires less expenses, less resources and fewer number of employees because of single authority. Therefore, centralization is more cost effective than decentralization.

3. Suitable For

Centralization is suitable for the following conditions:

* It suits for small firms having less operational activities and fewer number of employees.

* It is suitable for those companies which cannot invest more capital and resources

* When subordinates are incompetent and require close supervision, direction and supervision.

4. Quick Decisions

Another advantage of centralization is that it allows quick decision making because of single authority and reservation of power in the top management. Managers can make decisions without consulting other members in the organization. Quick decisions are very useful in the time of crisis and emergencies.

5. Secrecy

Top level managers do not share official matters with subordinates in centralized organizations. So, internal and private matters can be kept confidential. Therefore, centralization ensures proper secrecy and privacy.

6. Better Quality Of Work

Because of clear chain of command, standardized system and better supervision in the workplace, employees' performance and efficiency will be improved. Improved performance leads to improve in the quality of work and productivity of the firm. 

7. Proper Control

As we know that centralization is exercised by small firms having less activities and fewer number of employees. So, it is easier for the management to maintain better control and discipline in the organization. 

Drawbacks Or Disadvantages Of Centralization

Disadvantages or constraints of centralization can be described as follows:

1. Over Burden To The Managers

In centralized organization structure, power and responsibilities are given to top level managers. So, managers have to handle entire organizational activities which may lead to overburden and they cannot give sufficient time for other important functions such as policy making, business expansion etc.

2. Not Suitable

Centralization is not appropriate for large organizations having various activities and more employees. It is also not suitable if the subordinates are skilled, educated and experienced because they do not need more guidance and instructions.

      Also Read: 

Advantages And Disadvantages Of Decentralization

Difference Between Centralization And Decentralization

3. Lack Of Specialization

Because of the sole authority and concentration of power in the center, it discourages specialization in the organization. Lack of specialization may lead to decrease in the performance and productivity of the firm.

Due to the lack of specialization, there is no scope of growth and development opportunity for the employees. It may decrease the motivation and morale of subordinates. Decreased morale may lead to decrease in job satisfaction and increase the rate of employee turnover.

5. Possibility Of Dictatorship 

Because of the bureaucratic management and concentration of power, there is a high chance of misuse of power and dictatorship in centralized organizations.

6. Lower Productivity

Due to the lack of specialization and strict control, employees may be dissatisfied. Employee dissatisfaction negatively affect their performance which leads to decrease in the productivity and profitability.

Pros And Cons Of Centralization In Short

Pros:

- It is simple and cost effective organizational structure

- It is suitable for small firms which cannot afford more investment

- It allows prompt decisions at the time of emergency

- It ensure strict secrecy and privacy 

- It ensures better quality of work because of proper supervision, monitoring and control

- There is a clear chain of command 

Cons:

- It increases the workload of the superiors

- It lacks specialization and division of work in the workstation

- Managers may misuse their power

- Employees' morale may be decreases due to the dissatisfaction

- There is no scope for growth and career development

- It is not suitable for large scaled organizations

 What Is Laissez Faire Leadership Style ?

It is just opposite of authoritarian leadership style (where authority and power is exercised by the leader only). In laissez faire leadership style, authority is delegated to the employees and they are free to set goals and make decisions. Superiors trust their subordinates and do not interfere in their works. It encourages the employees to explore their knowledge , skills and capabilities in the organization.

Benefits Or Advantages Of Laissez Faire Leadership

The main advantages of laissez faire leadership style can be pointed out as follows:

1. Delegation Of Authority

One of the main benefits of laissez faire leadership is that authority and power is delegated to the members in the organization. Delegation of authority promotes specialization which helps to improve the performance and efficiency in the workplace.

2. Increased Motivation And Job Satisfaction

This leadership style provides opportunity for the subordinates to explore their skills and abilities. It also helps to increase creativity and develop decision making power. Therefore, employees are positively motivated which leads to increase in the job satisfaction.

3. Quick Decisions

As we know that subordinates have the authority to set their goals and make decisions to achieve those goals, it facilitates prompt decisions because they do not need to consult with their leaders to make any decision.

4. Proper Use Of Employees Potential

Another advantage of this leadership is that in ensures maximum utilization employees' potential in the workplace. Potentiality (skills, abilities, capabilities and creativity) of the subordinates are utilized properly which helps to obtain better output.

5. Development And Growth

Due to the limited role of the leader, subordinates have the opportunity to shine their skills, knowledge and performance. It is helpful in personal growth and career development.

6. Promotes Innovation

In this system, subordinates may find out shortcut methods and techniques to solve the problems. So, laissez faire leadership promotes innovations and new ideas in the organization.

7. Lower Employee Turnover

Because of positive motivation, possibility of growth and development, learning opportunity and better working environment, morale of the employees is increased. Increased morale and motivation decreases the rate of staff turnover.

The main disadvantages of laissez faire leadership can be pointed out as follows:

1. Not Suitable

This management system works properly if there are highly educated, skilled and specialist subordinates in the organization. It is not suitable for unskilled and inexperienced members because they cannot perform their tasks without proper guidance and supervision.

         Also Read: 

Advantages And Disadvantages Of Autocratic Leadership

Advantages And Disadvantages Of Democratic Leadership

2. It Lacks Privacy

All the internal matters of the organization are shared with the employees because of the openness of this leadership style. So, confidential matters may be leaked by the subordinates. Therefore, it is almost impossible to maintain secrecy and privacy. 

3. Lacks Supervision And Control

Another notable disadvantages of laissez faire leadership is that it lacks proper supervision, monitoring and controlling because of the freedom given to the employees. Therefore, it is difficult to maintain discipline which may reduce the performance and the output.

4. Lack Of Accountability

Because of the lack of clearly defined roles and responsibilities of superiors and subordinates, it may create confusion and misunderstanding in the organization. It will be difficult for the top level management to decide whom to make responsible and accountable.

5. Weakens  Leader's Role

Laissez faire leadership dilutes the role of leaders. Therefore, leaders cannot guide and instruct his/her subordinates properly. Also employee may ignore their superiors because of their weak position.

Pros And Cons Of Laissez Faire Leadership In Short

Pros:

- It encourages decentralization and specialization

- It increases the morale of the subordinates

- It facilitates personal growth and development opportunity

- It is very suitable for competent employees

- It encourages creativity and innovation

- It facilitates quick decisions

Cons:

- Because of the lack of secrecy, official matters may be leaked

- It dilutes the roles and importance of managers

- This system does not suits for unskilled, incompetent and inexperience subordinates

- There is a possibility of misunderstanding, confusion and conflict if the roles are not defined properly

- It lacks proper discipline in the workplace

- It lacks proper supervision and monitoring

What Is Democratic Leadership Style ?

A management system where subordinates are encouraged to take part in the decision making process is called democratic leadership style. Leaders allow the employees to give their views, ideas, suggestions and opinions while making decisions. This leadership brings specialization and promotes sense of team spirit in the workplace.

Benefits Or Advantages Of Democratic Leadership

The main advantages of democratic leadership style can be pointed out as follows:

1. Ensures Sound Decision

Ideas, suggestions and opinions of the members are considered as valuable inputs in decision making process. In democratic leadership, employees provide their suggestions and views to the leader which help to make better decision. Sound decisions help to solve complex problems.

2. Better Communication

Another advantage of democratic leadership is that it promotes open communication system in the organization. Because of two way communication, subordinates can share their feelings and thoughts freely with the leader and other members. It helps to build trust and sense of harmony in the organization.

3. Proper Utilization Of Human Resource

Employees can explore their capabilities because of the participative management. Management uses their skills and abilities properly to bring better results. Therefore, democratic leadership style ensures better utilization of employees' talents and skills which helps to improve their efficiency.

4. Increased Employee Motivation And Morale

Employees' contribution is respected in this management system. Their skills and abilities are highly appreciated. Subordinates feel valued when they are encouraged to take part in decision making process. Therefore, democratic leadership helps to increase motivation of the employees which lead to increase in morale and job satisfaction.

5. Higher productivity And Profitability

Democratic leadership style promotes specialization in the workstation. It helps to utilize available resources more effectively which increases the efficiency in the workplace. Increased efficiency leads to increase in the productivity and profitability of the firm.

This management system can be exercised in any business. It is suitable for both small and big organizations. It is more suitable where employees are competent and skillful.

7. Better Working Environment

Because of two way communication, sense of cooperation, motivation and participation, it creates better working environment in the organization. Good environment helps to increase performance that improves the quality of output.

Drawbacks Or Disadvantages Of Democratic Leadership

The main disadvantages of democratic leadership can be pointed out as follows:

1. Slow Decisions

One of the main drawbacks of democratic leadership is lengthy decision making process. Opinions and suggestions of all members should be considered while making decisions which is not suitable at the time of emergencies and crisis when quick response is required.

        Also Read: 

Advantages And Disadvantages Of Laissez Faire Leadership

Advantages And Disadvantages Of Autocratic Leadership

Difference Between Autocratic And Democratic Leadership

2. Not Applicable

It is suitable when employees are highly qualified, competent and self-motivated. It is not applicable if subordinates are incompetent and less experienced.

3. Lacks Secrecy

In democratic leadership, official matters are shared with the subordinates. So, confidential and internal organizational matters can be leaked by some employees. So, it lacks secrecy and privacy.

4. Difficult To Control

In this system, employees are treated like friends, in this situation it will be difficult for the managers to control them. It becomes complicated to maintain proper discipline in the organization.

Pros And Cons Of Democratic Leadership In Short

Pros:

- It facilitates participative decision making in the organization

- Open communication helps to make better superior subordinate relationship

- Because of specialization productivity and profitability can be improved

- It improves employee motivation which helps to decrease staff turnover

- This system can be applied in almost all types of firms

- It is useful for career development

- Subordinates' skills and talents are properly utilized

Cons:

- It is not suitable if subordinates are incompetent or unskilled

- long decision making process is not suitable at the time of crises

- It is difficult to maintain secrecy

- Leaders face difficulties to maintain better discipline

- It may lack responsibility and accountability

 What Is Autocratic Leadership Style ?

Autocratic or authoritarian leadership is a management style where a single supervisor or manager exercises full authority and power in the organization. Supervisors or leaders have absolute power (directing, supervision, controlling, decision making etc.) to control the entire organizational activities and subordinates.

Benefits Or Advantages Of Autocratic Leadership Style

The main advantages of autocratic leadership can be pointed out as follows:

1. Allows Quick Decision Making

Because of centralized authority, leader is a sole decision maker in this type of leadership style. He/she may make any decision without consulting others. So, it allows prompt decision making at the time of emergency and crisis. Quick decision helps the organization to cope with the frequent changes in the business behavior.

2. High Level Of Secrecy

Another notable advantage of autocratic leadership is secrecy and privacy. Managers do not share internal matters of organization with subordinates which eliminates the chance of leakage of important information.

3. Simple And Easy Style

This style is simple and can be easily understood by the employees because of proper separation of roles and duties of superiors and subordinates. They are clear about their jobs and responsibility because command flows directly from the boss to the lower level employees.

4. Better Discipline

Leaders establish strict supervision, monitoring and controlling in the workplace which helps to maintain better discipline in the organization.

5. Increased Productivity

Autocratic leaders provides suggestions and guidance to the employees directly which helps to improve efficiency and performance. Increased performance leads to increase in the productivity of the firm.

Autocratic leadership style is suitable for small organizations with less number of employees and fewer organizational activities. It is also useful when employees are less competent and need strong guidance and supervision. 

7. Clear Chain Of Command

Because of clear goals, properly defined roles and responsibility of the leader and subordinates, direct communication, there is a better chain of command in this style than other types of leadership style.

8. Useful For New And Incompetent Employees

In autocratic leadership, subordinates have to work as per the guidance and direction of the leader. So, it is useful for newly appointed, incompetent and inexperience employees to improve their skills and performance. 

Drawbacks Or Disadvantages Of Autocratic Leadership Style

The main disadvantages of autocratic leadership can be pointed out as follows:

1. Workload To The Superiors

One of the main drawbacks of autocratic leadership style is that power and authority is exercised by a single leader. He/she has the responsibility to handle entire organizational tasks and employees. This increases the workload and pressure to the leader that may decrease his efficiency, performance and quality of decisions.

        Also Read: 

Advantages And Disadvantages Of Democratic Leadership

Advantages And Disadvantages Of Laissez Faire Leadership

Difference Between Autocratic And Democratic Leadership

2. Negative Motivation

Autocratic leadership uses negative motivational techniques such as threat, punishment, demotion etc. to control the subordinates. It may decrease the morale of the employees.

3. Not Suitable For

It is not suitable for large and complex organizations with various functions and more employees because it lacks decentralization , specialization and division of labor in the workstation.

4. Lack Of Flexibility

Organization is totally dependent on one superior. Opinions, ideas and suggestions of other members are ignored by the leader. So, autocratic leadership style lacks flexibility.

5. High Employee Turnover

As we know that there is negative motivation and strict control in this leadership, employees may feel stressed and frustrated because of this uncomfortable working environment. So, they may leave that job at any time. Therefore, the rate of employee turnover is high in autocratic leadership.

6. Micromanagement and Dictatorship

Because of centralized authority, there is a possibility of micromanagement and dictatorship in the workplace.

7. No Utilization Of Creativity

Organization is totally dependent on the vision and working style of one superior and ignores the potential and creativity of the employees. So, it discourages proper utilization of human resources in the organization.

Pros And Cons Of Autocratic Leadership In Short

Pros:

- It facilitates quick decision at the time of crisis

- It is simple and easy to understand because of clear chain of command

- It ensures proper secrecy and privacy in the organization

- It helps to increase the performance of the employees which increases the productivity and profitability. 

- It increases the motivation of the leader

- It is very suitable for small organizations with few subordinates and limited functions

Cons:

- It is not suitable for big and complex organizational structures

- It is less flexible than other types of leadership style

- Skills, talents and creativity of employees are not properly utilized

- It increases employee turnover because of frustration and stress

- It increases the burden of superiors because of centralized authority

 What Is Committee Organization ?

An association of people which is formed to perform specific task or to make certain decision is called committee. It is very helpful to solve complex problems in the organization. It is a task force that brings highly qualified people together to achieve specific objective.

Benefits Or Advantages Of Committee Organization

The main advantages of committee can be pointed out as follows:

1. Encourages Specialization 

Committee is an association of highly qualified individuals having different skills, knowledge and abilities which is formed to perform specific function in the organization. Because of diversified knowledge and abilities, it brings specialization in the workstation. Specialization helps to simplify complex tasks and also helps to achieve better result.

2. Ensures Sound Decisions

Because of the participative management, ideas and suggestions of each member is considered while making decisions. Decisions are made after long discussion and by analyzing each and every possible alternatives. Therefore, it ensures better decision making and helps to select the most appropriate solution. 

3. Better Communication And Coordination

Another benefit of committee organization is that it helps to establish better communication between the members which promotes cooperation, coordination and sense of team-spirit in the workplace.

4. Exchange Of Idea

In committee, members or employees can share their knowledge and ideas to others as well as can get information and knowledge from others. So, employees can learn and enhance their skills.

5. Increased Motivation

Because of the participative decision making, learning and career development opportunity, committee organization helps to increase motivation and morale of the members.

6. Opportunity For Development

Committee helps to learn new skills, improve communication and also help to improve decision making power. So, it provides a platform for executive development. 

Drawbacks Or Disadvantages Of Committee Organization

The main disadvantages of committee can be pointed out as follows:

1. Waste Of Cost And Time

It requires adequate time and effort to form committee structure. It requires a lot of money for conducting meeting, for travelling and to hire specialist manpower. Therefore, committees are not suitable for small companies.

2. Difficult To Maintain Secrecy

Another drawback of committee organization is that it lacks secrecy and privacy. This structure is consist of several members of different background. So, it becomes difficult to maintain secrecy of internal matters.

       Also Read: 

Advantages And Disadvantages Of Matrix Organization

Advantages And Disadvantages Of Line Organization

Advantages And Disadvantages Of Functional Organization

3. Accountability And Responsibility Problem

In committee structure, all decisions are taken by the group collectively. So, individual member of the group is not accountable and no one wants to take responsibility for the mistakes.

4. Conflict And Misunderstanding

As we know that committee organization is an association of different people from different background, so there remains a chance of misunderstanding and conflict among the members.

5. Chance Of Domination

Some aggressive members in the committee may try to dominate the entire group. It may create conflict and may disturb the working environment.

Pros:

- It encourages specialization which helps to find better solution by simplifying the problem

- Better decisions can be made because of participative decision making process

- It improves the motivation and morale of employees

- Knowledge and ideas can be shared among the members

- Provides platform for executive development

- It ensures better communication and builds sense of team-spirit in the organization

Cons:

- It is costly and time consuming structure

- Whole organization may be dominated by few individuals

- Decision making process is very long which is not suitable for emergency situation

- Due to the lack of privacy and secrecy, internal matters of the organization may be leaked

- There is a possibility of misunderstanding and conflict between the members in the committee