Many large-scale systems exhibit the structure of weakly connected components, In such cases, proper identification of weakly coupled subsystems will add insight into large-scale system behavior, and aid in related tasks such as the design of decentralized control. epsilon-decomposition is a well-known efficient graph-theoretic algorithm for achieving a complete set of nested decompositions of a large-scale system. This paper shows how system matrix scaling can affect these decompositions, and determines that a system is properly scaled for epsilon-decomposition when it is max-balanced, a property associated with weighted directed graphs. Also, it is shown that an existing algorithm for max-balancing can be altered slightly to return the complete set of epsilon-decompositions, thus removing the need for two separate algorithms. Finally, the advantages of max-balancing before decomposition are shown for the application of decentralized control subsystem identification.