Question

When a company is faced with a complicated problem, what should they do centralize or decentralize decision-making? Explain why.

Answer 1

Explanation:

When company have the complicate problem is should be analyzed that what is problem about, is it about decision making or about the execution.

When company has a complicate problem in execution functions the firm need to be decentralized because,

Decentralization will adapt to unique requirement of every branch in organization and will help to react to those problem quicker. Whenever there is problem arises the local units in organization can develop skills that can solve the functional problems. Decentralized will give branches in organization more power and ownership for creating more effective process or function.

When company have complicate problem in decision making then they need to centralized because,

Centralization will create a decision which will more likely to align with priorities and organization strategy. This will give more clarity in decision making and those decision will have more voice closer to organization.