A company X Ltd manufacturing cosmetics, which has enjoyed a pre-eminent position in business, has grown in size. Its business was very good till 1991. But after that, new liberalised environment has seen entry of many MNC's in the sector.
With the result, the market share of X Ltd has declined. The company had followed a very centralised business model with directors and divisional heads making even minor decisions., this business model had served the company very well as consumers has no choice But now, the company is under pressure to reform and decentralise.
(i) What do you understand by decentralisation? Can an organisation, in general, be fully centralised or fully decentralised?
(ii) Explain any four advantages of decentralisation.