Basis for Decentralization

Decentralization includes assigning decision-making authority to lower-level people; thereby a subordinate is given considerable leeway in deciding to perform his work. Decentralization is necessary for large- size or-generations. However, independent decision-making authority to subordinates may lead to disintegration of the organization unless there is a clear indication of the contributions of each unit towards the realization of common objectives. Objectives indicate the contributions to be made by each unit for tying them effectively and allowing the managers concerned to exercise their individual skills and initiative.

Integrating: Organization, Group and Individual. Clearly specified objectives may provide integration of organization and its various groups and individuals. An organization cannot exist apart from its individuals, and various groups associated with it, such as creditors, customers, etc. If the objectives are clear, these will communicate the relationship between the organization and various groups and individuals. Therefore, the individuals and groups can better be integrated because they have clear basis for dealing with the organization.