Disadvantages of decentralization

1.       Problem of co-ordination and control: - Top management face problem of co-ordination and control. As all divisional and departmental manager are independent to work, make decision and plan their work schedule close direction and control is not possible in such organization co-ordination also becomes difficult as all department work independently.

2.       High cost: - Small organization cannot think about decentralization because of high cost. All divisional, departmental and unit manger have to be paid more and they ask for various benefits and facilities.

3.       Unsuitable for specialized service: - Decentralization is unsuitable for utilization of specialized services like accounting, personal and technical. They should be control by centre.

4.       Not suitable in emergency: - During emergency quick decisions are required and decentralization cannot give quick decision. Hence at the time of crisis and emergency, decentralization may not be suitable.

5.       Lack of managerial capacity: - To exercise authority, manager must be capable and competent enough but in many organizations there will be lack of managerial capacity to exercise authority. Hence decentralization may be infective.

6.       Managerial desires and fears: - Managers will not be willing to distribute authority or managers will not be willing to accept authority because they fear that they will not be in position to exercise authority. Hence decentralization is ineffective.