Decentralization Case

The processes of centralization and decentralization are very important aspects of any functional enterprise. Each of the processes has many advantages and disadvantages that it may offer. Decentralization has many advantages to it. One of such is that the management is able to shift its responsibilities on to the lower managers, thus being able to focus on the much more important responsibilities that may improve the well-being of the company as opposed to having to waste their time on the daily duties. Through decentralization, the company is able to hire specialists within their own field and therefore gain the necessary expertise for the specific business department. The third reason is that the managers are capable of building a closer customer relationship which is very important in running a successful organization. It allows for independent decision making and provides a way for the managers to train within the field and gain more exposure and experience.

There are few disadvantages to decentralization. They may result from cost repetition where the company has to hire two people to perform two of the same specific jobs. It is difficult to put the goals of the heads of the business units on the same page with the upper management of the company. The goals of a CEO may not be aligned with all the managers. There may be too many horses pulling the wagon in many different directions. Also, as the author of the previous aforementioned article states, centralization is necessary for companies that are struggling and during the periods of contraction.