A centralized organization structure is more likely to further the cause of good strategy execution than is a decentralized organization structure. True or false? Explain.

Question

Quizplus · Accepted Answer

It depends. Both structures have drawbacks. Pushing decision-making authority deep down into the organization structure and empowering employees in a decentralized organization presents its own organizing challenge: how to exercise adequate control over the actions of empowered employees so that the business is not put at risk at the same time that the benefits of empowerment are realized. In contrast, hierarchical command-and-control structures typical of centralized or authoritarian organizations may make an organization sluggish in responding to changing conditions because of the time it takes for the review/approval process to run up all the layers of the management bureaucracy. Also, centralized decision-making is often impractical-the larger the company and the more scattered its operations, the more that decision-making authority has to be delegated to managers closer to the action.

A Centralized Organization Structure Is More Likely to Further the Cause