Unit 1:The Dynamic New Workplace

Centralized vs De-centralized Structures

Introduction

Decision making power can be either kept in the hands of a few people or spread out among the workforce

Depends on the characteristics of the workforce Degree of trust Corporate culture

Centralized Structures

In complete centralization, subordinates have no authority at all (the opposite is true for complete de-centralization)

Certain functions in a business will always be centralized Standardized procedures Decisions that affect corporate vision Decisions made by more qualified personnel Strong leadership is often key

Centralized Structure

Decision Maker

Advantages

Rapid decision making

Better control

Better sense of direction

Disadvantages

Possible delays in decision makingIncreased pressure on senior

managementInflexibleDemotivating

Decentralized Structures

Some decision-making authority and responsibility is passed onto others

Key decision making is still centralized

AdvantagesInput from

workforceSpeedier day-to-

day decision making

Higher moraleImproved

accountabilityTeamwork is

encouraged

Disadvantages

Loss of controlGreater chance of

mistakesReliance on effective

communicationDuplication of

functions

Business Structure Entrepreneurial structure

Central decision making Little consultation needed

Pyramid structure Shared decision making Specialization is possible

Matrix structure Emphasizes a project based team approach Based on specialization of employees

Independent structure Non-organizational

Exercise – Henry Mintzberg

Organizational Structures

Entrepreneurial Structure

Pyramid Structure

Matrix Structure

Factors Influencing Structures

SizeViews of ownershipBusiness objectivesExternal factorsTechnologyCorporate culture

Recent TrendsDelayering

Making the organizational structure “flatter” Removing layers of middle management

Emphasis on multi-skilled teamsQuick response is a major factorEmployees are being empowered to make

more decisions

Mini Case Study

Case: Wesley Hains

Source: Jones, Hall, Raffo, Business Studies,3rd Edition, Unit 58, page 416