Centralised and decentralised organisations
Centralised organisations
Centralised organisations are where most decisions are taken by senior managers and then passed down the organisational A system triangular in shape; the higher up the triangle the fewer people there are, but they have more power, wealth or responsibility.. This structure relies on having strong and competent managers.
Advantages
Centralised management structures can lead to greater uniformity within the organisation as each branch of the business will be using standardised procedures.
Disadvantages
Centralised organisational structures are often less responsive to localised external pressures. It can also lead to demotivated staff who are not being given the opportunity to be involved in the decision-making process.
Decentralised organisations
Advantages
Decentralised organisations delegate authority down the The chain of command represents the path of authority through which orders and feedback are passed., thus reducing the speed of decision-making.
Each department within the organisation has the authority to make their own decisions. The business will be more responsive to changes in individual/local markets as staff in each department have a greater local knowledge.
Employees will be more motivated as they are given the opportunity to make decisions and be creative.
Disadvantages
Overall control of the organisation is delegated to departmental managers. This may lead to poor decisions as branch managers may not be as experienced as the managers in the head office. Individual branches may begin to compete and the overall corporate culture may be harder to develop.