Where decisions are made
Decision making can also be:
- centralised
- decentralised
The structures of cenetralised and decentralised decision-making
Centralised decision making
Centralised decision making is when most decisions are taken by senior managers or the head office.
| Advantages | Disadvantages |
| decisions made by the most experienced people | staff demotivated from lack of input in decisions |
| decisions made more quickly | central team slower to respond to local changes in market |
| lead to greater uniformity within the organisation |
| Advantages | decisions made by the most experienced people |
|---|---|
| Disadvantages | staff demotivated from lack of input in decisions |
| Advantages | decisions made more quickly |
|---|---|
| Disadvantages | central team slower to respond to local changes in market |
| Advantages | lead to greater uniformity within the organisation |
|---|---|
| Disadvantages |
Decentralised decision making
Decentralised decision making is when each department within the organisation has the authority to make their own decisions.
| Advantages | Disadvantages |
| staff motivated by opportunity to make decisions and be creative | decisions made by less experienced people |
| local teams can respond quickly to changes in local market | local decisions may be inconsistent with overall strategy |
| can provide better level of customer service |
| Advantages | staff motivated by opportunity to make decisions and be creative |
|---|---|
| Disadvantages | decisions made by less experienced people |
| Advantages | local teams can respond quickly to changes in local market |
|---|---|
| Disadvantages | local decisions may be inconsistent with overall strategy |
| Advantages | can provide better level of customer service |
|---|---|
| Disadvantages |