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Disadvantages of Decentralization

Disadvantages of Decentralization

Lack of Coordination: under decentralization each division or department of the enterprise has to be self sufficient in every respect. For example production marketing accounting personnel etc. this may not only result in duplication of functions but may also lead to wastage of resources because often on or the other facility remains under utilized in each division.

Lack of able managers: a decentralization enterprise has to depend on divisional managers. But it is difficult to find persons who are adequately equipped to run a division independently.

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