Disadvantages of Decentralization

This video discusses some disadvantages of decentralization.

While decentralization has many benefits, it may also create problems. Lower-level managers may not be aware of top management's overall strategy for the company and may therefore make decisions that are contrary to that strategy. In addition, it may be very difficult to coordinate the activities of lower-level managers in a large organization if they are empowered to make decisions. For example, quality may suffer if the manager of every Dairy Queen is allowed to choose how many cherries to put on top of a sundae.—
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