Question : Statement 1: A decentralized organization promotes quicker decision-making.
Statement 2: Decentralization limits the authority of lower-level managers.
Option 1: Statement 1 is true, and Statement 2 is false.
Option 2: Statement 1 is false, and Statement 2 is true
Option 3: Both Statement 1 and Statement 2 are true.
Option 4: Both Statement 1 and Statement 2 are false.
Correct Answer: Statement 1 is true, and Statement 2 is false.
Solution : The correct answer is (a) Statement 1 is true, and Statement 2 is false.
Statement 1 is true. Decentralization involves delegating decision-making authority to lower levels of the organization. With decision-making authority distributed to lower-level managers, decisions can often be made more quickly as they are closer to the point of action and have the necessary authority to act promptly.
Statement 2 is false. Decentralization actually grants authority to lower-level managers, allowing them to make decisions within their areas of responsibility. It does not limit their authority; instead, it empowers them to act and make decisions autonomously within their assigned domains.
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