"On the other hand" is used as a form of contrasting two different issues or two different benefits. "This option is good but the other option is also good," or "This option is bad but the other option is also bad." It gives no preference to either option; that is entirely determined by what the options are.
If we leave for vacation today, we can meet up with my brother. On the other hand, if we leave tomorrow, we can avoid all the traffic.
^Here, we contrast two different benefits.
Going on the south trail means we'll get rained on. On the other hand, we don't have the ropes to safely make it up the north trail.
^Here, we contrast two different detriments.
It can also be used to examine a cost and a benefit of a given choice.
This compact car can fit in so many different parking spots. On the other hand, I can barely fit a week's groceries in it.
Given sample sentence according to using on the other hand, I would rather I opted for the latter instead of the former, semantically. Am I right?
No. "On the other hand" simply means that the decision has weights in both directions. In this case, the sentence is arguing for a balanced approach - not concentrating too much power in the hands of too few while keeping the chain of command tight enough to avoid chaos.