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Decentralized Organizational Structure: Advantages and Homework Help

What is a decentralized organization?

As opposed to a centralized organization where all the decisions are taken by the management at the top, decentralized organizations are companies where most of the decisions are made by mid or lower level managers. As such its operation is not centralized only at the top but is decentralized among various employees of the organization.

The senior managers have passed some of their authority and decision making power onto the subservient managers and this means that cost center managers, investment managers or profit center managers have the power to make some decisions on behalf of the company. Decentralized structure brings in flexibility and ease of operation in a company.

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Pros of decentralized organizational structure:

Our decentralized organizational structure homework help shall give students a glimpse into the advantages of decentralization:

  • Employees who are directly involved in the work would have a more transparent knowledge of the situation and therefore should be able to determine the appropriate course of action.
  • Since the burden of making every small is removed from the shoulders of senior managers, they can concentrate on bigger issues like strategic planning.
  • There’s no bureaucracy involved, since one does not have to wait for a proposal to pass through various layers of management before it can be approved. Hence it becomes possible to make prompt decisions and this works as a great advantage in a competitive environment.
  • Employees who are given the power to make decisions develop a sense of responsibility and their dedication towards the organization increases. They feel empowered and are also free to make adequate use of their wisdom and knowledge without being held back Employees, once given a position of authority, prefers to stay and serve the company for a long period and hence the instances of employee turnover are reduced.
  • It helps the higher level management to judge the decision making abilities or skills of certain employees and thus, based on these observations, they can plan promotions accordingly.
  • Employees are required to be answerable to fewer managers as the intermediaries are removed. In turn, overhead cost reduces.

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