In the light of the above statement the importance of decentralisation may be understood with the help of following points:
1. Develops initiative among subordinates: Decentralization helps to improve self-confidence. It empowers the subordinates to take their own decisions and thus they learn how to depend on their judgements. Through decentralisation the subordinates are empowered to become capable to face challenges and find solutions to the problems. Decentralization policy helps an organization identify and tape talented people who can prove to be dynamic leaders.
2. Develops managerial talent for the future: Through a good decentralization policy, the subordinates can be best trained and prepared to meet contingent circumstances and helps in identifying such employees who cannot be given challenging jobs. Such employees can be assigned challenging jobs which they can do independently. Thus an organisation can have a pool of talented people in the organization.
3. Quick decision making: In the centralised organization the top management takes almost every decision. The information from one level to another level takes time and sometimes opportunities are lost to the competitors. In decentralized organizations, the employees are empowered on the basis of their capabilities, talents, and guts to take to crucial decisions without taking approval from all levels. Thus a decentralized organization is well dynamic, well informed, and quick in decision making to grab the opportunities.
4. Facilitates growth: Decentralisation awards in greater autonomy not to divisional and departmental heads but to the lower level as well. This allows each employee to compete with another to produce the best in true spirits. Consequently, with each department doing its best in a bid to outdoor the other the productivity levels increase and organisation is able to generate more returns which can be used for expansion purposes.