Question

Decentralization should be applied with caution as ...............

• A. It can lead to organisational disintegration if the departments start to operate on their own guidelines which may be contrary to the interest of the organisation.
• B. Employees resist it
• C. It puts burden on top management
• D. It reduces autonomy

Hint:

Excessive decentralization risks organisational disintegration; therefore, it must always be balanced with centralized control over core strategic policies.

Answer 1

The Correct Option is A

Concept:
Decentralization involves the systematic delegation of authority across all levels of an organization.
While it speeds up decision-making and fosters operational initiative, it also requires effective checks and balances to keep the organization unified.

Step 1: Identifying the Risks of Excessive Decentralization:
Decentralization grants operational autonomy to lower managerial levels and regional divisions.
If implemented without adequate oversight, individual divisions may prioritize their own narrow departmental goals over overall corporate strategy.
This departmentalism can create internal conflicts and lead to organizational disintegration.

Step 2: Evaluating the Distractor Options:
$\bullet$ Option (B) is incorrect because employees typically favor decentralization, as it provides autonomy, recognition, and promotional growth.
$\bullet$ Option (C) is incorrect because decentralization relieves the burden on top management by delegating routine operating decisions downward.
$\bullet$ Option (D) is incorrect because decentralization increases subordinate autonomy rather than reducing it.

Step 3: Verification of the Correct Rationale:
Option (A) accurately identifies the risk of organizational disintegration if departments begin pursuing independent, conflicting agendas.

Step 4: Final Answer:
Hence, option (A) is the correct choice.