Separation of businesses into more manageable operating units is termed decentralization.
a. True
b. False
The Correct Answer is
a. True
Decentralization, as described in the statement, refers to the separation of businesses into more manageable operating units. The correct answer to the question is indeed (a) True. Let’s delve into the details of why this answer is correct and then explore why the other options are not accurate.
Explanation of Correct Answer (True):
Decentralization is a managerial concept that involves distributing authority and decision-making across various levels of an organization rather than concentrating it at the top.
This strategy aims to empower lower-level managers and employees, allowing them to make decisions that are crucial to their specific areas of operation. By doing so, the organization becomes more flexible, responsive, and adaptable to changes in the business environment.
In a decentralized structure, businesses are divided into smaller operating units or departments. Each unit operates semi-autonomously, meaning it has a certain degree of independence in decision-making while still aligning with the overall goals and objectives of the organization.
This structure is often preferred in large and complex organizations as it facilitates better coordination, faster decision-making, and increased efficiency.
Decentralization can have several advantages, such as improved responsiveness to local conditions, enhanced employee motivation and development, quicker problem-solving, and reduced burden on top management.
The distribution of decision-making authority ensures that decisions are made by individuals who have a better understanding of the specific issues at hand.
The statement correctly aligns with the concept of decentralization, which involves the separation of businesses into smaller, more manageable operating units. Decentralization is a strategic management approach aimed at distributing decision-making authority across different levels of an organization.
By dividing businesses into smaller units, this strategy empowers local managers and departments to make decisions tailored to their specific contexts. This approach enhances flexibility, responsiveness, and efficiency within the organization, making the assertion that separation into manageable units is synonymous with decentralization fundamentally accurate.
In summary, decentralization is a strategic approach that enhances organizational efficiency and effectiveness by dividing businesses into more manageable operating units. This is why the correct answer to the question is (a) True.
Explanation of Incorrect Answers:
b. False:
This statement asserts that the separation of businesses into more manageable operating units is not associated with decentralization, which is inaccurate. Decentralization, as a management principle, precisely involves the division of businesses into smaller, more manageable units.
This strategic approach aims to distribute decision-making authority to lower levels of the organization, allowing for quicker responses to local needs and fostering innovation and efficiency. Denying the connection between decentralization and the division of businesses into manageable units contradicts the fundamental principles of organizational decentralization.
Decentralization is a widely recognized strategy to improve organizational performance by empowering units or departments to make decisions suited to their specific contexts.
This distribution of decision-making authority across the organization’s various levels enables quicker problem-solving, better resource allocation, and increased responsiveness to changing market conditions.
Hence, the assertion that the separation of businesses into manageable units is not associated with decentralization is incorrect and does not align with established managerial practices.
Decentralization, as a managerial strategy, precisely involves dividing businesses into smaller units to distribute decision-making authority. This approach facilitates more efficient operations by empowering lower-level units to make decisions aligned with the organization’s overall goals.
Thus, denying the relationship between decentralization and the creation of manageable units is incorrect and disregards the established practices of organizational decentralization.
In summary, option “b. False” is inaccurate because it negates the essential relationship between decentralization and the division of businesses into more manageable units, which is a core aspect of decentralization in organizational management.
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MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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