Decentralization:Top down planning and bottom up planning

Decentralised planning is a kind of percolation of planning activities or process from the Centre to the sub- state levels, i.e., district, sub-division, block and village level. Since the inception of First Plan, the importance of decentralised planning was emphasised in order to achieve active people’s participation in the planning process.

Top down planning

Pros

Economic planning is assumed to modify the restraining influence of limited Resources by recognizing the existence of particular constraints and by choosing and coordinating Investment projects so as to channel these scarce factors into their most productive outlets.
Planning is necessary to take care of the poor and the downtrodden who have little asset endowments to benefit from the natural Growth of economic activities. POVERTY alleviation programmes have definitively helped in reducing poverty and generating EMPLOYMENT.
Planning process manages the flow of resources across regions for accelerated removal of regional disparities and thus brings about integration of such regions into the mainstream of economic activity in the country.
Public sector investment has a major role to play in strengthening of the physical Infrastructure-2/”>INFRASTRUCTURE, i.e., energy, transport, Communication and Irrigation etc. in order to support the growth process on a sustainable basis.
It is the Government and its planning process which is adequate for protecting Environment, forest and ECOLOGY.

Cons

This economic system sees planners not being able to accurately predict shortages, surpluses and consumer preferences, which entails that they cannot also allocate resources efficiently. This would result in some areas having abundance of goods that cannot be sold and other areas experiencing shortages. On the other hand, a free market allocates resources based on the price system, making sure they will go where demand and supply are dictated.
Opponents say that this system will lead to dissent among citizens, as their basic right of free will is going to be challenged. This means that it will eventually lead to the citizens revolting against the government.
It has been observed that a centrally planned economy can stifle economic freedom, as citizens would have no incentive to take entrepreneurial risks or innovate. As you can see, central planners suppress the profit motive by considering decisions from entrepreneurs and transferring them to the state. As economists believe, Society functions best when the economy is guided by invisible hand, which rewards personal economic freedom, but central planning restricts this strategy.

Bottom up planning

Pros

Following are some of the important functional factors responsible for adoption of decentralised planning in the present context in India:

Considering the huge size and proportion of rural Population in India, it is felt that proper linkages must be established between dispersed small villages and also between such villages and adjacent small towns by developing appropriate infrastructural facilities such as feeder roads, improved transport facilities, Marketing and storage facilities, Health and sanitation facilities and other welfare centres. Under decentralised planning better linkages between villages and small towns can be developed under local conditions, priorities and resources.
Decentralised planning is considered as more realistic as it maintains a close coordination between locally available resources, local skills, local manpower and local requirements. It is considered as a flexible one as it is easily adjustable and adaptable under the changing local conditions and requirements. Moreover, it is considered as the practical one as it can fulfill the normal requirements of the rural population. Adaptation and flexibility of planning largely depends upon the environment prevailing in each region and sub-region. Thus decentralised planning can achieve the best result in implementing plan projects at the local level.
Decentralised planning is suitable for the development of agricultural and allied activities such as Animal Husbandry, Horticulture-2/”>Horticulture, Fisheries-2/”>Fisheries, Forestry along with development of village and Cottage industries.
Decentralised planning can promote active participation of local people in implementing various local plans and programmes. Thus it can enhance the involvement of local communities in such development activities.
Under decentralised planning, wastage of resources can be reduced to a minimum level as the people participating in these developmental activities keep a close watch over the utilisation of fund as well also on the implementation of plan projects.
Decentralised planning can show more trickle down or percolation effects in respect of Poverty Alleviation programmes and employment generation in rural areas as in this type of planning, various projects are selected for generating huge productive employment opportunities in the rural areas.
Decentralised planning is helpful in raising the level of social Services by launching various programmes of health, Nutrition, drinking water, Education etc. in a more effective, quicker and sustainable manner.
Decentralised planning is more helpful in utilizing the various non-conventional energy sources such as solar power, wind, animal and plant wastes etc. in rural areas. Such utilisation of non-conventional energy sources requires various agencies which can work in close association with communities in villages and small towns and also can provide necessary technical and financial support from such agencies. Decentralised planning can pave the way for utilisation of such resources.

Cons

Decentralisation may lead to the problem of co-ordination at the level of an enterprise as the decision-making authority is not concentrated.
Decentralisation may lead to inconsistencies (i.e. absence of uniformity) at the Organisation level. For example, uniform policies or procedures may not be followed for the same type of work in different divisions.
Decentralisation is costly as it raises administrative expenses on account of requirement of trained personnel to accept authority at lower levels. Even the services of such highly paid manpower may not be utilised fully, particularly in small organisations.
Introduction of decentralisation may be difficult or may not be practicable in small concerns where product lines are not broad enough for the creation of autonomous units for administrative purposes.
Decentralisation creates special problems particularly when the enterprise is facing number of uncertainties or emergency situations. The decision-making process gets delayed and even correct decisions as per the changing situations may not be possible.

Decentralization is the delegation of decision-making authority from a central authority to lower levels of an organization. This can be done in a number of ways, such as through the creation of decentralized units or departments, or through the use of matrix management.

There are a number of reasons why organizations might choose to decentralize. One reason is to improve efficiency. By delegating decision-making authority to lower levels, organizations can make decisions more quickly and in a more timely manner. This can be especially important in fast-paced industries or in situations where there is a need to respond quickly to changes in the environment.

Another reason for decentralization is to improve effectiveness. By delegating decision-making authority to lower levels, organizations can tap into the knowledge and expertise of employees who are closest to the customer or who have the most experience with a particular issue. This can lead to better decisions that are more likely to meet the needs of the organization.

Decentralization can also improve employee morale and motivation. When employees are given the opportunity to make decisions, they feel more involved in the organization and are more likely to be committed to its success. This can lead to increased productivity and innovation.

However, there are also some potential drawbacks to decentralization. One is that it can lead to a lack of coordination and consistency across the organization. When different units or departments are making their own decisions, there is a risk that they will make decisions that conflict with each other. This can lead to confusion and inefficiency.

Another potential drawback of decentralization is that it can lead to a loss of control by senior management. When decision-making authority is delegated to lower levels, senior managers may have less control over what is happening within the organization. This can be a problem if senior managers need to make quick decisions or if they need to ensure that the organization is meeting its goals.

Overall, decentralization can be a useful tool for improving efficiency, effectiveness, and employee morale. However, it is important to be aware of the potential drawbacks of decentralization and to take steps to mitigate these risks.

Top-down planning is a planning method in which decisions are made by a central authority and then passed down to lower levels of the organization. This type of planning is often used in large, complex organizations where it is difficult to get everyone on the same page. Top-down planning can be effective in ensuring that all employees are working towards the same goals, but it can also be slow and bureaucratic.

Bottom-up planning is a planning method in which decisions are made by lower levels of the organization and then passed up to the central authority. This type of planning is often used in smaller, more agile organizations where it is important to be able to make quick decisions. Bottom-up planning can be more flexible and responsive to change, but it can also be less coordinated and consistent.

The best planning method for an organization will depend on its size, complexity, and culture. Some organizations may find that a combination of top-down and bottom-up planning is the most effective approach.

Top-down planning is a planning process that starts with a central authority and then cascades down to lower levels of the organization. This type of planning is often used in large, complex organizations where there is a need for coordination and control.

Bottom-up planning is a planning process that starts with the people who are closest to the work and then moves up the organization. This type of planning is often used in small, agile organizations where there is a need for flexibility and innovation.

Frequently asked questions about top-down planning:

What are the advantages of top-down planning?

Top-down planning can be effective in large, complex organizations because it provides a clear and concise direction for the organization. It can also help to ensure that all parts of the organization are working towards the same goals.

What are the disadvantages of top-down planning?

Top-down planning can be inflexible and slow to adapt to changes in the environment. It can also lead to a lack of ownership and commitment from employees.

When is top-down planning most effective?

Top-down planning is most effective in large, complex organizations where there is a need for coordination and control. It is also effective in organizations that are facing a crisis or a major change.

Frequently asked questions about bottom-up planning:

What are the advantages of bottom-up planning?

Bottom-up planning can be more flexible and adaptable than top-down planning. It can also lead to greater employee ownership and commitment.

What are the disadvantages of bottom-up planning?

Bottom-up planning can be slow and inefficient. It can also lead to a lack of coordination and control.

When is bottom-up planning most effective?

Bottom-up planning is most effective in small, agile organizations where there is a need for flexibility and innovation. It is also effective in organizations that are facing a rapidly changing environment.

Question 1

Which of the following is not a characteristic of top-down planning?

(A) Decisions are made by a central authority.
(B) Plans are implemented by lower levels of management.
(C) Plans are highly detailed.
(D) Plans are flexible and adaptable.

Answer

(D)

Top-down planning is a planning process in which decisions are made by a central authority and then implemented by lower levels of management. Plans are typically highly detailed and inflexible.

Question 2

Which of the following is not a characteristic of bottom-up planning?

(A) Decisions are made by lower levels of management.
(B) Plans are implemented by a central authority.
(C) Plans are flexible and adaptable.
(D) Plans are highly detailed.

Answer

(B)

Bottom-up planning is a planning process in which decisions are made by lower levels of management and then implemented by a central authority. Plans are typically flexible and adaptable.

Question 3

Which of the following is an advantage of top-down planning?

(A) It is efficient.
(B) It is effective.
(C) It is flexible.
(D) It is adaptable.

Answer

(A)

Top-down planning is efficient because it allows for a clear chain of command and centralized decision-making. This can help to ensure that plans are implemented quickly and effectively.

Question 4

Which of the following is an advantage of bottom-up planning?

(A) It is efficient.
(B) It is effective.
(C) It is flexible.
(D) It is adaptable.

Answer

(C)

Bottom-up planning is flexible because it allows for input from all levels of the organization. This can help to ensure that plans are tailored to the specific needs of the organization.

Question 5

Which of the following is a disadvantage of top-down planning?

(A) It can be inflexible.
(B) It can be slow.
(C) It can be unresponsive to change.
(D) All of the above.

Answer

(D)

Top-down planning can be inflexible, slow, and unresponsive to change. This is because decisions are made by a central authority and then implemented by lower levels of management. This can make it difficult to adapt plans to changing circumstances.

Question 6

Which of the following is a disadvantage of bottom-up planning?

(A) It can be inefficient.
(B) It can be ineffective.
(C) It can be chaotic.
(D) All of the above.

Answer

(C)

Bottom-up planning can be inefficient and ineffective because it can be difficult to coordinate the efforts of different departments or divisions. This can lead to chaos and confusion.

Question 7

Which type of planning is more appropriate for a large, complex organization?

(A) Top-down planning.
(B) Bottom-up planning.

Answer

(A)

Top-down planning is more appropriate for a large, complex organization because it allows for a clear chain of command and centralized decision-making. This can help to ensure that plans are implemented quickly and effectively.

Question 8

Which type of planning is more appropriate for a small, simple organization?

(A) Top-down planning.
(B) Bottom-up planning.

Answer

(B)

Bottom-up planning is more appropriate for a small, simple organization because it allows for input from all levels of the organization. This can help to ensure that plans are tailored to the specific needs of the organization.

Question 9

Which type of planning is more appropriate for a rapidly changing environment?

(A) Top-down planning.
(B) Bottom-up planning.

Answer

(B)

Bottom-up planning is more appropriate for a rapidly changing environment because it allows for plans to be adapted quickly to changing circumstances. This is because decisions are made by lower levels of management, who are closer to the customer and have a better understanding of the changing needs of the market.

Question 10

Which type of planning is more appropriate for a stable environment?

(A) Top-down planning.
(B) Bottom-up planning.

Answer

(A)

Top-down planning is more appropriate for a stable environment because it allows for plans to be implemented quickly and