Centralized decision making may prove effective in firms that must respond quickly to fluctuations in customer demand.

Question

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Centralized decision making can slow down the process of responding to fluctuations in customer demand because decisions have to go through the higher levels of management, delaying response times. Decentralized decision making is often more effective in such scenarios as it allows for quicker adjustments by empowering lower-level managers or employees closer to the customer to make decisions.

Centralized Decision Making May Prove Effective in Firms That Must