Decentralized Organizations And Its Impact On Organizational Strategies

When an organization grows beyond the smallest operation, management divides work vertically, as those at the top delegate more of their work to those below them. The vertical hierarchy establishes what decisions people at each level can make. Centralization is when those at the top make most decisions,

The organization of power within a corporation is a rigid dichotomy between centralization and decentralization. Substitute strategies can exist anywhere along the spectrum whether they are completely centralized, completely decentralized or somewhere in between. Though Cervus’ methods are substitutable, centralized policies have not proven to be nearly as successful in maintaining

Organizational structures have changed greatly in the last fifty years. Whereas most organizations were once rigid and centralized, most organizations are now taking advantage of flexible and decentralized structures. These new structures have affected the standard relationships between employees and managers. Additional layers of management have been created which blur the lines between the functions of managers and the functions of employees. Employees have become decision makers, and some managers barely have any authoritative power. Subsequently, these changes to organizational structures have impacted organizational strategies. This too, expounds upon the increased power of the employee and the reduced authority of the manager. The changes in organizational strategies make use of the dispersion of power in order to reduce costs and enable additional safeguards within these organizations.

“An organizational structure defines how job tasks are formally divided, grouped, and coordinated” (Robbins and Judge, 2007, p. 583). The six key elements that Robbins and Judge explain that managers need to address are; work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. Coming from a military background, I find it easy and effective to bring in a strong chain of command. Robbins and Judge (2007) define chain of command as “an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom” (p. 542). This chain of command eliminates confusion, keeps employees working on their respective tasks without distracting others with any involvement on certain areas, and can help to break up the cliques. Currently there is a jumbled Sociogram depicting unilateral and bilateral communication throughout the organization. The chain of command can stream line this communication and ensure the right tasks are being delegated and communication can be effectively transferred through the appropriate levels to increase efficiency.

One of the themes in Thomas McCraw’s book American Business Since 1920: How It Worked is mastering centralized control through decentralized management. As the business world rapidly expanded competition for market share between the larger companies increased. More task management was necessary in order to delegate within the businesses as they expanded. The market was also changing and as an answer to that some companies implemented a revised version of traditional management; decentralized management (McCraw, 2009).

In addition, it is essential to generate detailed divisions for merchandise progress and industrial can have an effect on the company’s administrative structure known as product evolution. Centralized management retains all major decisions with one detailed decision-making group, whereas decentralized management lets company managers to have more ‘say’ in the executive process. Next, corporations that participate in the mass production of products may not exert as

When a company has a tall hierarchy, they can either be decentralized or centralized. Decentralized authority allows lower levels of management the

Evo using a decentralized organizational structure. When Mr. Phillips started his company, he started off using a centralized organization structure, due to the size of the company. As the company began to see rising growth, the owner recognized the need to transform to decentralization. The lower level employees at Evo have been given power to make decisions which directly affect their individual jobs (Phillips &Gully, 2014). By allowing the lower level employees involvement it is not only giving the employees the opportunity for growth but also allows upper management to free up time for other important responsibilities (Phillips &Gully, 2014). Employees also build trust in the company, change employee attitudes, and ultimately rises the overall

We have learned the characteristic of decentralization which clearly goes against the grain of a micromanager, but according to White (2010), eliminating hierarchy and shifting responsibility to the lower levels; thereby, expanding on the staff's capabilities which in turn will create

Post-bureaucratic organization is the key process of responsibility and resources of decentralization of authority. In the higher level of an organization decentralization deals with assigning responsibilities to semi-independent units and reduces the role of the corporate core to a minimum. Instead of running like a single entity the organization is a federation of co-operating company. (Sable, 1991, p. 28) The concept of decentralization revolves around the concept of reversing the chain of command and allowing lower level employees to handle decision-making and resources.

PwC PSP is a fairly decentralized organization. Decentralization refers to how responsibility for coordination & control within a firm lies in individual managers or subunits, while centralization refers to cases where this control lies in a person or level within the firm. (Burton, et al, 2011)

Decentralization has several advantages. Staffs are encouraged to develop decision-making skills, which help them advance in their careers. The autonomy afforded by this style of operation also increases job satisfaction and motivation. For example, if maintenance staff receives a complaint on a fault by a customer, in a decentralized organization the maintenance staff has the power to fix the problem without getting the approval from the administration. If that same front maintenance staff determines that a customer has been

Other common terms for the idea of organizational decentralization include: team self-management, self-management, shared control, distributed leadership (Lambe, Webb, & Ishida, 2009) and holacracy (Robertson, 2007). While these terms may have small differences they all describe the common theme of distributing power across organizations. Several concepts help to explain why decentralization and the encouragement of teamwork throughout an organization are often superior to traditional management structure.

Because of the growth of economic markets, developments in the legal system and transformations in the nature of authority, organizational analysis arose. Weber views organizational efficiency as product of the mix of two structures namely: first, a scheme of clear specific and categorical rules and policies implemented by a specific detail organizational structure and documentations and second, a unique division of labor. Authority departs from once known as succession to a now bureaucratic one that drives those from lower levels of the structure to obey managers. Organizational analysis finds ways in which organizational goals affect organizational structures. Another model of organizational analysis that arose was that of Simon and Marsh that states that organizational decision makers base decision makers on uncertainty of situations confronting the organizations (Hannah,

In a centralized organizational structure one individual is responsible for making all the decisions and maintains control of the company by giving direction. While Decentralized organizational structures often rely on several persons with the authority to make final decision for the company’s well being. Some benefits associated with a centralized organization are as follows: Reduction in cost in the work environment, having a focused vision on one common goal and Reduction in conflict. A Few drawbacks of a centralized organization include, No secrecy because all ideas and decisions are conveyed to all, No special attention and Delay in work. Advantages associated with Decentralization are; Huge relief is provided off the top managers, Greater use is made of employees skills and Decision making is left up to educational and well informed people.