Advantages Of Decentralized Structures

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According to our textbook, organizational structures are defined as “how job tasks are formally divided, grouped, and coordinated (Judge and Robbins 432).” Once being rigid and highly centralized, the past 50 years have brought forth a shift to these structures, now being more flexible and decentralized. There are many advantages and disadvantages that come with both of the structure types. These new flexible and decentralized structures have affected employee/manager relationships by allowing more effective decision making, improving contact between lower level to higher level workers, and motivating the employees and local managers. They have also impacted organizational strategies in various ways.

In centralized structures, only the top …show more content…

These centralized structures had very weak contact between the different levels of an organization. The now popular decentralized and flexible structures create relationships that are much closer than centralized structures. The elimination of boundaries in decentralized structures allows close interaction and collaboration with people inside the firm. This close knit contact is highly fluid and adaptive. For example, all levels of workers in a decentralized organization would be able to collaborate together and brainstorm solutions and ideas. An organization that emphasizes collaboration and might benefit from a decentralized structure. Decentralization also fosters cooperation and motivates the employees which is further …show more content…

Based on a firm’s organizational structure, it can have direct influences on the strategies a firm might decide to utilize. The strategies an organization chooses to implement requires a proper match with the infrastructure of the firm. Organizations now use decentralized structures to implement an innovation strategy. The innovation strategy is a key factor of the success of an organization. The strategy focuses on the advancement of products and services. By allowing more people to be involved, as opposed to centralized structures, this offers a larger pool of creative and innovative ideas. A company needs this large pool of ideas in order to pick out game changing proposals. 3M and Google excercise decentralized structures in order to take advantage of the innovation strategy. In addition to the advantage of utilizing an innovation strategy, decentralized structures offer an ideal infrastructure for an effective customer service driven strategy. Effective customer service resolves problems at the first point of contact with the customer. This is ideal because the lower level workers who have contact with the customers possess decision making power in decentralized organizations. By giving lower level employees and managers autonomy, they are able to bend the rules for what they see best fitting in any given situation. An empowered employee with autonomy is able to

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