2 THE BENEFITS OF DECENTRALIZATION INCLUDE

12-2 The benefits of decentralization include:

or in part to any one of the segments. If the

(1) freeing top managers to focus on strategy,

departments of a company are treated as seg-

higher-level decision making, and coordinating

ments, then examples of the traceable costs of a

activity; (2) improving operational decision mak-

department would include the salary of the de-

ing, since lower-level managers often have bet-

partment’s supervisor, depreciation of machines

ter information about local conditions; (3) ena-

used exclusively by the department, and the

costs of supplies used by the department. Ex-

bling quicker response to customer needs; (4)

amples of common costs would include the sal-

training lower-level managers to take on greater

ary of the general counsel of the entire com-

responsibility; and (5) providing greater motiva-

pany, the lease cost of the headquarters build-

tion and job satisfaction for lower-level manag-

ers.

ing, corporate image advertising, and periodic

depreciation of machines shared by several de-

partments.