Question

Responsibility accounting can ultimately drive decision-making in an organization. Having said this, what is the difference between a centralized and decentralized organization structure? Which do you feel is better for effective decision-making? Why?

Answer 1

Difference between centralised and decentralised organisation structure.

1.In centralization, there is a hierarchy of formal authority for making all the important decision for the organization.

And in decentralization decision making is left for the lower level of organization.

2.In centralised structure decision are taken in less time

While in decentralised better quality of decision is there because of various suggestions.

3.In centralised structure , employees are not motivated as they can't participate in any business decisions.

While in decentralised employees are motivated and therefore work efficiently.

I feel decentralised form is better for effective decision making because in this form various talented minds give their suggestion which helps in effective decision making.