Importance of decentralization: The idea of decentralization is becoming popular in modern times owing to several advantages it holds.

Its importance can be understood through the following points: 

1. Quick decisions: In decentralization, the person who has the power to take the decision is actively involved in his area of decision making. As a result, decisions are taken quickly and effectively.

2. Less work load on top level:

• The top level is the level where most of the policy matter related decisions are taken.
• By adopting decentralization, the decision making powers are given to middle or lower level. Hence, the work load on upper level is reduced.

3. Increases motivation:

• Under decentralization, employees of middle level and lower level are given ^ certain decision making independence.
• These employees become more motivated because they get a feeling that their seniors trust them and their decisions.
• Moreover, when the decisions become correct, they get more motivated and confident.

4. Increase in management abilities:

• Under decentralization, employees of middle level and lower level are given certain decision making independence.
• Hence, these employees become efficient leaders. They develop skills to work in coordination.
• They develop good administrative skills and they learn the methods of controlling the staff.
• Ail this improves management abilities of these employees and the company produces managers for the future.

5. Effective control:

• Under decentralization, the managers of all the levels have enough power to manage, make decisions and control their respective areas.
• As a result, they can exercise control over the employees, can take decisions if employees makes mistakes and can take disciplinary actions. This makes management easy and controlling effective.

6. Harmony is created:

• Due to decentralization, employees of all levels are included in the decision making process and hence are given importance.
• All the levels of officers and employees i.e. the decision makers and the followers discuss business matters and then take proper decisions.
• This increases interaction among people, feeling of onenesls and harmony.