Importance of decentralization
Decentralization can be defined as even and systematic distribution of authority at every level of management. Under decentralization every employees working at different levels gets some share in the authority. Decentralization is a policy matter and managers plan in advance whether to go for centralized or decentralization policy. Some times company follows a mixed policy of centralized and decentralization.
They keep the important matters such as financial decisions, structural decisions with the top level management only and share the common decisions with the people working at different levels.
In the process of decentralization top level managers are not overburdened with the responsibility and authority as they systematically pass the authority and responsibility at different levels and they become free to concentrate on core and important issues. Passing of authority at middle and lower level shows the trust and faith of top level in their subordinates and this trust and faith motivates the employees working at different levels as they are allowed to take decision without seeking the approval of superiors.