Question

You have been running a successful business and have branched out into complimentary markets. You have always been able to run the business through a highly skilled staff which helped make all decisions. As your market share in both your original business and the complimentary business grows, you find you and your management team are struggling to meet the demands of the business.

Explain the reasons for either staying as a centralized business or to decentralize the business.

What advantages will you gain based on your decision?

How will you measure the effects of your decision?

Answer 1

If the top executives are finding it difficult to meet the demands of the business, the business should be decentralized because the business is all about survival and profitability in the industry. Not meeting the demands of the business will make it difficult to meet the requirements of customers which will affect the reputation of the business.

It also offers certain advantages like the burden of the top executives will reduce and they will be able to focus on the more important matters of the business. It offers better control and quick decision making. It also boosts the morale of the employees as they see the opportunity to grow in a decentralized organisation.

The effects of this decision can be measured by evaluating various things like customer satisfaction, return of the business, learning of employees.