When decision making is decentralised
A) Upper management does not make decisions
B) Decision-making authority is delegated throughout the organisation
C) The important information in an organisation is very general
D) Organisations are less likely to experience agency costs concerning goal congruence

Question

Quizplus · Accepted Answer

Decentralized decision-making means that the authority to make decisions is delegated throughout the organization, rather than being concentrated in upper management. This can increase employee engagement, promote innovation and create a more agile organization. Decentralization also reduces the risk of agency costs, as decision-making power is distributed more widely, and there is less opportunity for conflicts of interest between those making decisions and those affected by them. Therefore, the best choice here is B.

When Decision Making Is Decentralised