Organisational structures - centralized and decentralized
- Created by: Revisiola
- Created on: 08-05-16 20:46
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- Organisational structures
- Centralized
- Rely on an individual to make decisions
- Small businesses often use this structure since the owner is responsible for the company's business operations
- Advantages
- senior management has more control
- procedures can be standardized through the organisation - economies of scale and lower costs
- senior management can make decisions from the point of view of the business as a whole
- subordinates would focus on their department only
- senior managers are more experienced and tend to make better decisions
- in times of crisis businesses might need strong leadership
- communication may improve if there are fewer decision makers
- Business owners may require more time to complete tasks and the work completed may be of poor quality
- mostly smaller businesses / flat structure organisations
- Rely on an individual to make decisions
- Decentralized
- Several individuals responsible for making decisions and running the business
- team environment
- Advantages
- Empowers and motivated workers
- reduces stress of senior management and frees time to focus on important tasks
- provides subordinates with greater job satisfaction - Theory Y
- subordinates may have better knowledge of the 'local' conditions affecting their area of work
- they should make more informed and well-judges decisions
- greater flexibility and quicker response since subordinated can make decisions
- gives experience to middle and junior levels of the management
- individuals having different opinions might create conflict
- mostly larger businesses / tall structure businesses
- Several individuals responsible for making decisions and running the business
- Centralized
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