Unit 1: The Dynamic New Workplace Centralized vs De-centralized Structures.
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Transcript of Unit 1: The Dynamic New Workplace Centralized vs De-centralized Structures.
Unit 1:The Dynamic New Workplace
Centralized vs De-centralized Structures
Introduction
Decision making power can be either kept in the hands of a few people or spread out among the workforce
Depends on the characteristics of the workforce Degree of trust Corporate culture
Centralized Structures
In complete centralization, subordinates have no authority at all (the opposite is true for complete de-centralization)
Certain functions in a business will always be centralized Standardized procedures Decisions that affect corporate vision Decisions made by more qualified personnel Strong leadership is often key
Centralized Structure
Decision Maker
Advantages
Rapid decision making
Better control
Better sense of direction
Disadvantages
Possible delays in decision makingIncreased pressure on senior
managementInflexibleDemotivating
Decentralized Structures
Some decision-making authority and responsibility is passed onto others
Key decision making is still centralized
AdvantagesInput from
workforceSpeedier day-to-
day decision making
Higher moraleImproved
accountabilityTeamwork is
encouraged
Disadvantages
Loss of controlGreater chance of
mistakesReliance on effective
communicationDuplication of
functions
Business Structure Entrepreneurial structure
Central decision making Little consultation needed
Pyramid structure Shared decision making Specialization is possible
Matrix structure Emphasizes a project based team approach Based on specialization of employees
Independent structure Non-organizational
Exercise – Henry Mintzberg
Organizational Structures
Entrepreneurial Structure
Pyramid Structure
Matrix Structure
Factors Influencing Structures
SizeViews of ownershipBusiness objectivesExternal factorsTechnologyCorporate culture
Recent TrendsDelayering
Making the organizational structure “flatter” Removing layers of middle management
Emphasis on multi-skilled teamsQuick response is a major factorEmployees are being empowered to make
more decisions
Mini Case Study
Case: Wesley Hains
Source: Jones, Hall, Raffo, Business Studies,3rd Edition, Unit 58, page 416