What are the advantages and disadvantages of decentralizing decision-making authority in an organization?

What will be an ideal response?

An effective means of keeping the organizational hierarchy flat is to decentralize authority to lower-level managers and nonmanagerial employees. When lower-level managers have the responsibility to make important decisions, the problems of slow and distorted communication are kept to a minimum. This increased responsibility can increase motivation by making lower-level jobs more interesting and rewarding. In addition, fewer managers are needed because their role is not to make decisions but to act as coach and facilitator and to help other employees make the best decision. Finally, decentralizing authority allows an organization and its employees to behave in a flexible way, even as the organization grows and becomes taller.

Although more and more organizations are taking steps to decentralize authority, too much decentralization has certain disadvantages. If divisions, functions, or teams are given too much decision-making authority, they may begin to pursue their own goals at the expense of the organization's goals. Furthermore, with too much decentralization, a lack of communication among functions or divisions may prevent synergies among them from materializing and organizational performance may suffer.