Answer
Benefits:
1. Greater Responsiveness: Decentralization allows local units to respond more effectively to specific local needs, which can lead to improved customer satisfaction and service quality.
2. Faster Decision Making: Decentralized decision-making processes can result in quicker responses to issues and opportunities, enhancing the organization's agility and competitiveness.
3. Increased Motivation: Subunit managers in a decentralized system often have more autonomy and responsibility, which can boost their motivation and job satisfaction.
Costs:
1. Coordination Challenges: Decentralization can lead to coordination issues between different units, potentially causing inefficiencies and conflicts.
2. Risk of Inconsistent Strategies: When subunits have substantial decision-making authority, it may lead to inconsistent strategies or goals across the organization, which can impact overall cohesion and alignment.
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