Question : Statement 1: Decentralization of authority enhances the decision-making process.
Statement 2: It empowers lower-level managers to make decisions independently.
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. When authority is decentralized, decision-making can often be faster and more aligned with the specific needs and circumstances at those levels, enhancing the overall decision-making process.
Statement 2 is true. Decentralization involves granting decision-making authority to lower-level managers, empowering them to make decisions independently within their assigned areas of responsibility. This empowerment fosters a sense of ownership and accountability, which can lead to more effective and efficient decision-making.
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