OBCOLLEGE : ACG2071 MANGERL ACCI Course Home Content Grades Communication v Asse
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OBCOLLEGE : ACG2071 MANGERL ACCI Course Home Content Grades Communication v Assessments ? Tools? Resources ? Discussions ListView Topic 24 Discussion Question Available before Sunday, July 29, 2018 11:00 PM EDT. Must post first. Subscribe Characterize the business you are currently working for (or have worked for in the past) as either centralized or decentralized. List some of the characteristics of the business that supports your classification decision. Which do you prefer, working in a centralized or decentralized environment and why? Rubrics Discussion Rubric Start a New Thread SortExplanation / Answer
I have been working in a decentralised business.
Centralization is the degree to which decision-making authority is concentrated at higher levels in an organization. In centralized companies, many important decisions are made at higher levels of the hierarchy, whereas in decentralized companies, decisions are made and problems are solved at lower levels by employees who are closer to the problem in question.
Decentralized companies give more authority to lower-level employees, resulting in a sense of empowerment. Decisions can be made more quickly, and employees often believe that decentralized companies provide greater levels of procedural fairness to employees. Job candidates are more likely to be attracted to decentralized organizations. Because centralized organizations assign decision-making responsibility to higher-level managers, they place greater demands on the judgment capabilities of CEOs and other high-level managers.
Many companies find that the centralization of operations leads to inefficiencies in decision making. For example, in the 1980s, the industrial equipment manufacturer Caterpillar suffered the consequences of centralized decision making. At the time, all pricing decisions were made in the corporate headquarters in Peoria, Illinois. This meant that when a sales representative working in Africa wanted to give a discount on a product, they needed to check with headquarters. Headquarters did not always have accurate or timely information about the subsidiary markets to make an effective decision. As a result, Caterpillar was at a disadvantage against competitors such as the Japanese firm Komatsu. Seeking to overcome this centralization paralysis, Caterpillar underwent several dramatic rounds of reorganization in the 1990s and 2000s (Nelson & Pasternack, 2005).
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