Question : Statement 1: Decentralization allows for quicker decision-making in an organization.
Statement 2: It involves the empowerment of lower-level managers to make decisions.
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: Both Statement 1 and Statement 2 are true.
Solution : The correct answer is (c) Both Statement 1 and Statement 2 are true.
Statement 1 is true. Decentralization involves delegating decision-making authority to lower levels of the organization. This empowers lower-level managers to make decisions in their respective areas, which can lead to faster decision-making as decisions can be made closer to the point of action without waiting for approvals from higher levels.
Statement 2 is true. Decentralization is all about empowering lower-level managers and employees to make decisions within their scope of responsibility. This empowerment boosts morale, enhances accountability, and fosters a sense of ownership among employees, ultimately leading to more effective decision-making.
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