Decentralization may help an organization respond effectively to local conditions,but may eventually harm the organization's performance.

Question

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The management problems that Unilever experienced illustrate the effect of barriers of distance and culture.One reason for William Lever's control problems was that communication over great distances was difficult.Another problem was the difficulty of doing business in societies that were separated from Britain by barriers of language and culture.As a result,management practices had to be tailored to suit each unique national culture.After Lever's death in 1925,top management decentralized decision-making authority to managers of various national subsidiaries so they could develop a management approach that suited the country in which they were operating.One result of this was that the subsidiaries grew distant and remote from one another,which reduced Unilever's performance.

Decentralization May Help an Organization Respond Effectively to Local Conditions,but