Module 06 Discussion 1 – Decentralization

Discuss at least two advantages and disadvantages of decentralizing a firm.

Please make your initial post by midweek, and respond to at least one other student's post by the end of the week. Students post is below.

Student's post:

Benefits to decentralization include decisions being made in a timely manner along with employee morale increasing as lower level managers are able to call the shots for their departments.

As these lower level managers are better able to make faster decisions and implement necessary changes without having to wait for approval from higher, job efficiency can improve and the manager may feel like a more important part of the team.

Other benefits include these managers being better trained for future promotions because they will learn to make tough decisions that affect the company they work for.

Of course not everything is hunky dory for decentralization. There are some concerns with this method. Things such as a manager having differing views from those of the company. This manager could make changes that go against what the company is trying to do. This could be a costly mistake to correct. Companies must ensure that the employees they place in decision making roles have the same views as the company to keep the company running as the founders may have wanted.

An additional setback to this method may be that the goals of the firm become too narrow. Companies may not branch out or explore new ideas if managers are set to limits of their decision making abilities.

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