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Decentralization: good or bad

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Decentralization is a question facing top executive’s everyday. Companies are deciding whether or not it is a good idea to hand down authority to lower levels of the company or to remain centralized so top level managers have the only input in organizational operations. Not only companies but also countries have to decide whether or not to decentralize. There are many advantages and disadvantages to both sides. This paper will examine the benefits of decentralization and whether they are good or bad for an organization.


I would hate to work for a company where I had no say in anything that happened. I’m not saying that I need to make top management decisions or decide on the organizational operations, I would like to be able to make suggestions and have input on how to improve the company or how to make things run better and more efficient. Decentralization would allow me that freedom by letting me have the input I need to be a more happy employee and increase my motivation. Employees dislike being told just what to do and have it left at that. Come to work do your job and leave is not really a pleasurable environment, though many people and also many mangers like it that way. There are many reasons to decide to decentralize including financial situation and employee satisfaction to name a few. Decentralization can occur in many different forms and in many different places.

What is Decentralization and how does it affect us?

Decentralization is commonly referred to as the downshift of power. It occurs when the right to make decisions is passed own to the middle and lower levels of the management hierarchy. Centralization on the other hand is when top management makes all the decisions regarding the organizational structure. Decentralization allows people and their institutions to be empowered throughout an entire societal system whether global, national or household levels. The more people are involved in the decision making and

Management at all levels the greater the potential for effective and equitable development.

Decentralization has its ups and downs. Looking at it through a government prospective it can be a good thing. Instead of just a federal level you also have provincial representatives. To go even further, you can include town mayors and aldermen. They can be split into fiscal, administrative and political processes of decentralizing. Central governments around the world are decentralizing to have lower level types of government and into the private sector. Political pressure is what drives most to decentralization. It’s tough to say whether decentralization is good or bad because of the fact it may be better for some, and not for others. It varies greatly within a country or the structure of an organization.

Decentralization in Healthcare and Education

The general idea for decentralizing healthcare is to hopefully improve quality and coverage. But it could come at a price because of the impact it could have on health system reforms and how they could be not well understood. Decentralization is often pushed politically in the health care systems. There needs to be proper planning along with lots of research to determine whether or not it is a good idea so it is not a disappointment. Healthcare is not something to just toy with. Some advantages would be a more rational and unified healthcare system along with a decrease in duplication of services. It would also decrease inequalities and perform greater integration. Education is another important aspect in the decision to decentralize. There is a global trend of decentralizing education because of the fact that it would move the decision making down from the minister of education to the local governments, communities and schools themselves. In the poor quality and access to services in some schools today, decentralization could improve efficiency, accountability and responsiveness. It would reflect local priorities and encourage participation.

Decentralization in developing countries

Decentralization can help improve developing countries in many ways. It will improve the weaknesses s and implement better systems of control. There are many weaknesses in underdeveloped countries, which include weak democratic processes and institutions. By decentralizing the country could create channels for the community and initiate community participation. Most also have weak regulatory systems and information systems. By changing ways they can create more local incentives for compliance and establish and improve regulation systems. By transferring the power down different regions that have different needs and concerns will be heard instead of changing as a whole. Each sector will have their own say and this should please the majority.

Participation and Decentralization

These two aspects go hand in hand with each other to make the other work. A successful decentralization requires a certain degree of local participation. It allows different subordinate’s to respond better to local needs and have an information flow between the two sides. 13000 units of local government in Latin America are now elected compared to the 3000 in 1973. This is an attempt to improve the degree of citizen participation in government action.

Without participation decentralization will not work successfully. The point is to hand down power but if no one takes that power and uses it, it’s meaningless. Participation can be a great advantage to have if there are many different opinions and not just the same point of view for all concerns. Employees feel a little bit of empowerment when they have the choice to make an important decision that will not only reflect on them but the company also. It can show responsibility and also provides motivation for the employee.


Decentralization can have negative and positive impact on its society and people. Many countries and organizations are experimenting with it and it seems to work well in most cases. Decentralization is not for everyone and can have negative effects. The success of a company can be determined by making only one decision so it takes a lot of thought in bringing change to a company. Decentralizing is a big change and takes time and research to determine whether or not to perform the change. It creates major challenges and is an ongoing battle; it is essential for guarding equity and quality, along with improving efficiency. These are the aspects to which all organizations strive for.


Meyer, N Dean. Fantasies, Fallings and Fundamentals. Retrieved March 30, 2003, from http://www.ndma.com/products/de/

Litvack, J. (1998). Rethinking Decentralization in Developing Countries. Retrieved March 30, 2003, from http://www1.worldbank.org/publicsector/decentralization

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