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Consider the following benefits:
(I) Reduced training costs within the organisation
(Ii) Better local decisions due to local expertise
(Iii) Better motivation of staff
(iv) Reduction in suboptimal behaviour
Which of these are advantages of the centralisation of decision-making within an organisation?
A (i) and (ii) only
B (i), (ii) and (iii) only
C (iii) only
D (i) and (iv)
Answer is D.
Professor, can you explain me fourth statement. How it is advantage of centralisation? I search sub-optimal behaviour but could not find anything which can explain me this.The question is a mess.
1 – More training is needed if people are going to be able to make decisions, so the cost of training is a disadvantage.
2 and 3 are both standard advantages of decision making.
4 Sub-optimal behaviour can arise from decentralisation eg if the manufacturing department decides to make 100,000 units but the sales department has a target of only 90,000. Ie a conflict.
So the advantages are (ii) and (iii) in my opinion.
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