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An advantage of decentralization is that there tends to be faster decision making and an ability to adapt to the demographic area of production. It also means that lower level managers have the opportunity to gain valuable experience and develop more fully because there is more room to grow.
I see the difference (while maintaining effetivness) lies in implementing business process controls and collaboration systems to allow for decentralized decision making and maintain central accountability. In my opinion, decentralizing accountability disturbes effectivness.
Centralization/decentralization refers to how much decision-making authority
has been delegated to lower management levels. Few organizations could function
effectively if all decisions were made by a select group of top managers, nor could
they do so if all decisions were delegated to the lowest levels of the organization.
Organizations have traditionally been structured as pyramids, with authority
and power concentrated at the top and with relatively centralized decision
making. As organizational environments became more complex and dynamic,
many organizations began to decentralize decision making. Many executives now
believe that decisions should be made by those people with the best information
to make the decisions, regardless of their level in the organization.
More decentralization might be needed under one or more of the following
conditions:
• The environment is complex or uncertain.
• Lower-level managers are capable and experienced at making
decisions.
• Lower-level managers want a voice in decisions.
• Decisions are relatively minor.
• Corporate culture is more open to allowing managers to have a say in
what happens.
• The organization is geographically dispersed.
• Effective implementation of the organization’s strategies depends on
managers having more involvement and flexibility to make decisions