1. Describe two major ways in which a company can grow. Give examples to illustrate the two ways of growing. A business can develop by organic growth or inorganic growth

a. Organic Growth:Organic growth in business refers to a company expanding its business through the use of its own resources and assets. Growing organically means a company expands without the use of mergers and acquisitions or other takeovers. An emphasis on organic growth is valued by many executives and investors since it shows a long-term, solid commitment to building the business. Organic growth can also be negative, meaning the company's business is actually contracting. Investors look at organic growth numbers to see if a company is increasing sales and revenues and if those increases are sustainable over the long term.

SignificanceOrganic growth shows how well management of a company is utilizing internal resources to increase sales and output. Mergers, acquisitions and takeovers can provide an artificial boost to a company's sales and revenue figures; this can cloud the picture of how the company is managing its resources. By focusing on the organic growth of the company, executives and investors can see exactly how the company is meeting its goals through its own internal means.

Workforce IssuesMany executives prefer to grow their companies organically due to the complexity and organizational issues that result from mergers and acquisitions. One major issue is the effect of merging two company's workforces, which can often result in culture clashes and morale issues. Employees can resist changes in the chain of command or workflow procedures, and high turnover can result. Organic growth allows the company to avoid these workforce issues entirely.

Strategic ConcernsOrganic growth allows company executives to set and achieve corporate goals in whichever manner they choose. Combining two companies often comes with the burden of sharing management responsibilities with executives from both firms; this can have an impact on the entire strategic outlook of the new company. A merger pursued as a way to achieve specific goals can wind up changing those goals completely. Executives stay in complete control of the company, when it is growing organically,

and can steer the business in a specific direction to achieve their objectives.

Significance to InvestorsInvestors love organic growth, not only because it shows management's effective use of resources and commitment to the business, but also because it makes analyzing the company a lot easier. When looking at a company's financials, it is important to note if sales and revenue figures have been inflated due to recent acquisitions. Often, investors will strip out all non-organic growth from a company's financials, showing the true growth potential of the core company. The less a company relies on mergers and acquisitions, the less work an analyst has to do to get to this core figure.

DisadvantagesGrowing a company organically takes an enormous commitment of resources and time. Equipment must be acquired, personnel hired and trained and sales conduits established. Often, companies utilize mergers and takeovers to acquire a fully developed business unit and avoid reinventing the wheel. Organic growth also puts all of the business risk squarely on the core company, as opposed to a company that acquires a new unit, sharing the risk between the core company and the new addition.

Organic growth strategies are built on four main pillars: revenue, headcount, PR, and quality.

1. RevenueRevenue is the lifeblood of any business. Without dollars flowing in, it is impossible to pay employees, suppliers and vendors. Businesses that are growing organically seek to grow revenue volume in the most efficient manner possible. Revenue growth eventually leads to profit growth, which is the end goal of organic growth strategies.Growing revenue allows for the effective functioning of the other three pillars. Without cash coming into a business, employees cannot be hired and advertising budgets become strapped.

2. HeadcountAs revenue grows, companies can afford to hire more employees. Headcount is critical for any growing business. For customer service, sales and marketing and production departments to function efficiently, they must be properly staffed.A good HR department is critical to the success of a growing company. Quality is more important than quantity for company headcount, as employees are the biggest asset of any corporation.

3. PRPublic relations and advertising allow companies to get the word out about their products and services. Good PR drives traffic to company websites and gets perspective customers attention. Good PR strategies also allow for revenue growth to keep those properly staffed departments busy.Bad PR can be more damaging to a company than good PR can be effective. Word of mouth, social media and traditional PR avenues

all must be used and monitored to ensure positive word-of-mouth advertising and branding.

4. QualityTo successfully grow any enterprise, there needs to be a quality product. Organic growth relies on repeat business from satisfied customers. Customers will rarely buy a product a second time if the first experience isn't top notch. Quality control and customer service are critical to gaining a sufficient sales volume to grow a company.

Popular Companies Using Organic Growth StrategiesMany well-known, public corporations use organic growth strategies. Best Buy, Outback Steakhouse and Tiffany and Company are just a few major brand names that grow every year through organic growth strategies.Best Buy's main competitor, Circuit City, went out of business in 2009. Outback Steakhouse is the best known steakhouse chain in the United States. Tiffany and Company is the standard in diamonds and jewelry.

New EU legislation also provides an opportunity for Davis Service Group. For example, the need for protective uniforms for industrial workers provides plenty of new contract work for textile services.

b. Inorganic GrowthA growth in the operations of a business that arises from mergers or takeovers, rather than an increase in the companies own business activity. Firms that choose to grow inorganically can gain access to new markets and fresh ideas that become available through successful mergers and acquisitions. Inorganic growth is seen often as a faster way for a company to grow when compared with organic growth. In many industries, such as technology, growth is often accelerated through increased innovation, and one way for firms to compete is to align themselves with those companies that are developing the innovative technology.

1. MergerTwo firms join by agreement. Mergers make it possible to share the resources of the two organizations and focus on the best activities of each

a. Horizontal integration refers to a situation where two firms at the same stage of production join.If Sunlight joined another firm hiring sheets to hotels and hospitals in the UK, this would be an example of horizontal integration.

b. Vertical Integration joins businesses at different stages

of production.For example, Sunlight could join with a company that makes hotel sheets. This shows backward vertical integration where Sunlight benefits from controlling the supply of the sheets it uses. This ensures quality control and on-time delivery.A business could also consider forward vertical integration. For example, it joins with a distribution company to economise on its transport costs. This could benefit Sunlight by showing its environmental responsibility.

The advantage of vertical integration is that it gives the business greater control over the supply chain of its product or service. The Sunlight business was partially vertically integrated by including the cleaning and delivery processes in its service.

2. TakeoverOne company buys at least 51% of the shares of another company. This enables the company with the larger number of shares to have control over the other business and select which activities to keep.There are different types of Takeovers as below:

a. Friendly takeoversBefore a bidder makes an offer for another company, it usually first informs the company's board of directors. If the board feels that accepting the offer serves

shareholders better than rejecting it, it recommends the offer be accepted by the shareholders.In a private company, because the shareholders and the board are usually the same people or closely connected with one another, private acquisitions are usually friendly. If the shareholders agree to sell the company, then the board is usually of the same mind or sufficiently under the orders of the equity shareholders to cooperate with the bidder. This point is not relevant to the UK concept of takeovers, which always involve the acquisition of a public company.

b. Hostile takeoversA hostile takeover allows a suitor to take over a target company's management unwilling to agree to a merger or takeover. A takeover is considered "hostile" if the target company's board rejects the offer, but the bidder continues to pursue it, or the bidder makes the offer without informing the target company's board beforehand.A hostile takeover can be conducted in several ways. A tender offer can be made where the acquiring company makes a public offer at a fixed price above the current market price. Tender offers in the United States are regulated by the Williams Act. An acquiring company can also engage in a proxy fight, whereby it tries to persuade enough shareholders, usually a simple majority, to replace the management with a new one which will approve the takeover. Another method involves quietly purchasing enough stock on the open market, known as a creeping tender offer, to effect a change in management. In all of these ways, management resists the acquisition but it is carried out anyway.The main consequence of a bid being considered hostile is practical rather than legal. If the board of the target cooperates, the bidder can conduct extensive due diligence into the affairs of the target company. It can find out exactly what it is taking on before it makes a commitment. But a hostile bidder knows only publicly-available information about the target, and so takes a greater risk. Also, banks are less willing to back hostile bids with the loans that are usually needed to finance the takeover. However, some investors may proceed with hostile takeovers because they are aware of mismanagement by the board and are trying to force the issue into public and potentially legal scrutiny.

c. Reverse takeovers

A reverse takeover is a type of takeover where a private company acquires a public company. This is usually done at the instigation of the larger, private company, the purpose being for the private company to effectively float itself while avoiding some of the expense and time involved in a conventional IPO. However, under AIM rules, a reverse take-over is an acquisition or acquisitions in a twelve month period which for an AIM company would:

exceed 100% in any of the class tests; or result in a fundamental change in its business,

board or voting control; or in the case of an investing company, depart

substantially from the investing strategy stated in its admission document or, where no admission document was produced on admission, depart substantially from the investing strategy stated in its pre-admission announcement or, depart substantially from the investing strategy.

An individual or organization-sometimes known as corporate raider-can purchase a large fraction of the company's stock and in doing so get enough votes to replace the board of directors and the CEO. With a new superior management team, the stock is a much more attractive investment, which would likely result in a price rise and a profit for the corporate raider and the other shareholders.

d. Backflip takeoversA backflip takeover is any sort of takeover in which the acquiring company turns itself into a subsidiary of the purchased company. This type of a takeover rarely occurs.

Pros and Cons of takeoverPros:

Increase in sales/revenues (e.g. Procter & Gamble takeover of Gillette)

Venture into new businesses and markets Profitability of target company Increase market share Decrease competition (from the perspective of the acquiring

company) Reduction of overcapacity in the industry Enlarge brand portfolio (e.g. L'Oral's takeover of Bodyshop) Increase in economies of scale Increased efficiency as a result of corporate

synergies/redundancies (jobs with overlapping responsibilities can be eliminated, decreasing operating costs)

Cons:

Goodwill, often paid in excess for the acquisition. Reduced competition and choice for consumers in oligopoly

markets. (Bad for consumers, although this is good for the companies involved in the takeover)

Likelihood of job cuts. Cultural integration/conflict with new management Hidden liabilities of target entity. The monetary cost to the company. Lack of motivation for employees in the company being

bought up. Takeovers also tend to substitute debt for equity. In a sense,

government tax policy of allowing for deduction of interest expenses but not of dividends, has essentially provided a substantial subsidy to takeovers. It can punish more conservative or prudent management that don't allow their companies to leverage themselves into a high risk position. High leverage will lead to high profits if circumstances go well, but can lead to catastrophic failure if circumstances do not go favorably. This can create substantial negative externalities for governments, employees, suppliers and other stakeholders.

2. Businesses grow when they have the resources to expand and opportunities exist for growth.

Explain how the acquisition of Berendsen provided such a good opportunity for the Davis Service Group. Acquisition is a type of Inorganic growth. Berendsen's acquisition is like Horizontal integration as Sunlight and Berendsen are specialist companies at the same stage of production. It was possible to pool the knowledge and expertise of the two companies so that both benefited. Berendsen was an ideal acquisition because, like Sunlight, it was the market leader in providing textile services in its geographical area like Denmark, Sweden, Norway, Austria, the Netherlands, Poland and Germany.Taking over Berendsen, rather than merging with it, gave Davis Service Group the control to put the best systems in place at Berendsen. It was able to:o reduce operating costs, for example, closing down some locations where Berendsen had

two outlets operating in the same areao strengthen the management of the two companieso save fixed costs, by cutting out the central headquarters of the company.

This put Berendsen in a stronger position to improve its sales and profits.

3. What aspects of European Union markets have particularly encouraged:o horizontal growth of the Davis Service Group?o organic as opposed to inorganic growth?

Berendsen's acquisition is like Horizontal integration as Sunlight and Berendsen are specialist companies at the same stage of production. It was possible to pool the knowledge and expertise of the two companies so that both benefited. The factors that might have been barriers to international growth were easy to overcome in this acquisition:o Language: Berendsen’s business operates across several European countries and uses

English as a common language.o Cultural differences: buying patterns and the culture in the areas where Berendsen operates

are similar to the UK.o Currency: the countries in which Berensden operates already used the Euro or had

currencies linked to the Euro. Organic growth is when a company increases the turnover of the existing business. Much of the growth of Sunlight and Berendsen involves organic growth.As part of the Group, these companies have increased their customers in existing locations, as well as in other areas of the rapidly developing EU market. Trade and living standards in the EU are growing fast. Large global companies are opening up new sites and they require textile services from Sunlight and Berendsen. Countries like Poland, which joined the EU in 2003, are experiencing growth in key sectors such as manufacturing so more uniforms are needed. New EU legislation also provides an opportunity for Davis Service Group. For example, the need for protective uniforms for industrial workers provides plenty of new contract work for textile services.Organic growth - building on existing resources - is sometimes the only way to grow. For example, in many Eastern European countries that were part of the former Soviet Union, there are few companies suitable to take over. Most businesses in these countries had previously been government-owned. They had poor equipment and/or had no need to rent out textiles. The EU currently has 27 member countries. It is a huge potential market. Any business in the European Union has over 500 million customers Goods and services can flow freely in the single European market. This means it is much easier to do business in the EU. Trade within this area has risen by 30% since 1992. The development of fast transport links, for example, the Channel Tunnel, high-speed trains and cheaper air links, means people can travel to and across Europe more easily. The Internet and email enable companies to communicate instantly. British firms locating factories and offices in the EU are able to benefit from a skilled labour force. Within Europe, most member countries use a common currency – the Euro. This makes it easy to trade within this market place.

4. If the company were to expand into new areas of the globe, where would you recommend and why? What factors might encourage or discourage this choice? If the company were to expand into new markets, the policy would remain one of recruiting the appropriate native speakers. With thisstaffing policy the company has to search widely in the UK to get replacements. Encouraging Factor

i. Davis group can go to developing region like Eastern Europe and South East Asia,

ii. Davis Group can get the advantage of European Union and can tap the Eastern Europe markets,

iii. South East Asia is most emerging markets of the world. Davis can establish itself as there are very few player in this industry in South East Asia.

iv. Lucrative U.S markets, NAFTA can play a major role in encouraging factor. Discourage Factors :-

i. Entry barriers because of government policies. ii. consumer perception, (in-predictable)

iii. Threat of local players (un-organized) iv. Established US local player

1. Using examples from the case study and other sources, explain what a conglomerate is and why it chooses to be one. Conglomerate is a corporation consisting of several companies in different businesses. Such a structure allows for diversification of business risks, but the lack of focus can make managing the diverse businesses more difficult.It can also be called as a corporation that is made up of a number of different, seemingly unrelated businesses. In a conglomerate, one company owns a controlling stake in a number of smaller companies, which conduct business separately. Each of a conglomerate's subsidiary businesses runs independently of the other business divisions, but the subsidiaries' management reports to senior management at the parent company.The largest conglomerates diversify business risk by participating in a number of different markets, although some conglomerates elect to participate in a single industry - for example, mining.These are the two philosophies guiding many conglomerates:

1. By participating in a number of unrelated businesses, the parent corporation is able to reduce costs by using fewer resources.2. By diversifying business interests, the risks inherent in operating in a single market are mitigated.

Advantages

1. Diversification results in a reduction of investment risk. A downturn suffered by one subsidiary, for instance, can be counterbalanced by stability, or even expansion, in another division. In other words, if Berkshire Hathaway's construction materials business has a bad year, the loss might be offset by a good year in its insurance business. This advantage is enhanced by the fact that the business cycle affects industries in different ways. Financial Conglomerates have very different compliance requirements from insurance or reinsurance solo entities or groups. There are very important opportunities that can be exploited, to increase shareholder value.

2. A conglomerate creates an internal capital market if the external one is not developed enough. Through the internal market, different parts of conglomerate allocate capital more effectively.

3. A conglomerate can show earnings growth, by acquiring companies whose shares are more discounted than its own. In fact, Teledyne, GE, and Berkshire Hathaway have delivered high earnings growth for a time.

Disadvantages1. Synergies are illusory.2. The extra layers of management increase costs.

3. Accounting disclosure is less useful information, many numbers are disclosed grouped, rather than separately for each business. The complexity of a conglomerate's accounts make them harder for managers, investors and regulators to analyze, and makes it easier for management to hide things.

4. Conglomerates can trade at a discount to the overall individual value of their businesses because investors can achieve diversification on their own simply by purchasing multiple stocks. The whole is often worth less than the sum of its parts.

5. Culture clashes can destroy value.6. Inertia prevents development of innovation.7. Lack of focus, and inability to manage unrelated businesses equally well.

2. Productivity can be calculated as the amount that each employee generates. Using the figures in the third paragraph, calculate the productivity of Davis employees. 3. Objectives of businesses vary from one to another. Give 3 different objectives that businesses may have. Business ObjectivesObjectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards to its stated aims. The most effective business objectives meet the following criteria:

S – Specific – objectives are aimed at what the business does, e.g. a hotel might have an objective of filling 60% of its beds a night during October, an objective specific to that business.

M - Measurable – the business can put a value to the objective, e.g. €10,000 in sales in the next half year of trading.

A - Agreed - by all those concerned in trying to achieve the objective. R - Realistic – the objective should be challenging, but it should also be able to be achieved by the

resources available. T- Time specific – they have a time limit of when the objective should be achieved, e.g. by the end

of the year. The main objectives that a business might have are:

Survival – a short term objective, probably for small business just starting out, or when a new firm enters the market or at a time of crisis.

Profit maximization – try to make the most profit possible – most like to be the aim of the owners and shareholders.

Profit satisficing – try to make enough profit to keep the owners comfortable – probably the aim of smaller businesses whose owners do not want to work longer hours.

Sales growth – where the business tries to make as many sales as possible. This may be because the managers believe that the survival of the business depends on being large. Large businesses can also benefit from economies of scale.

A business may find that some of their objectives conflict with one and other:

Growth versus profit: for example, achieving higher sales in the short term (e.g. by cutting prices) will reduce short-term profit.

Short-term versus long-term: for example, a business may decide to accept lower cash flows in the short-term whilst it invests heavily in new products or plant and equipment.

Large investors in the Stock Exchange are often accused of looking too much at short-term objectives and company performance rather than investing in a business for the long-term.

Alternative Aims and ObjectivesNot all businesses seek profit or growth. Some organizations have alternative objectives. Examples of other objectives:

Ethical and socially responsible objectives – organizations like the Co-op or the Body Shop have objectives which are based on their beliefs on how one should treat the environment and people who are less fortunate.

Public sector corporations are run to not only generate a profit but provide a service to the public. This service will need to meet the needs of the less well off in society or help improve the ability of the economy to function: e.g. cheap and accessible transport service.

Public sector organizations that monitor or control private sector activities have objectives that are to ensure that the business they are monitoring comply with the laws laid down.

Health care and education establishments – their objectives are to provide a service – most private schools for instance have charitable status. Their aim is the enhancement of their pupils through education.

Charities and voluntary organizations – their aims and objectives are led by the beliefs they stand for.

Changing ObjectivesA business may change its objectives over time due to the following reasons:

A business may achieve an objective and will need to move onto another one (e.g. survival in the first year may lead to an objective of increasing profit in the second year).

The competitive environment might change, with the launch of new products from competitors. Technology might change product designs, so sales and production targets might need to change.

4. The Ansoff matrix is often used to make decisions. Using the Ansoff matrix and the case study, outline the potential options available to the Davis group. 5. The EU is an attractive proposition for the Davis Group. Using the case study and any other knowledge and sources, explain why this is so. 6. Businesses grow both Organically and Inorganically. Using the case study, explain briefly what Organic and Inorganic growth are. 7. A merger is when 2 firms join together amicably. Although there are a number of positives to joining together, there can also be negatives. Make a list of both positive and negative effects of a possible merger.

Mergers and acquisitions mean the process of one business purchasing another business and blending the two together. Merging and acquiring a business is also known as a "take over." There are the pros and cons when it comes to the business of mergers and acquisitions. Pros Mergers and acquisitions have a profitable side that can create quite enormous profit for a company and expose the business to a myriad of financial resources. For a company that is on the verge of bankruptcy or in financial trouble from other reasons, merging with another company may become the only way to not only save the company but free up some much needed cash and credit. Acquiring a business for the purpose of creating a conglomerate or a quick sale and turning a profit, is part of the allure of mergers and acquisitions. In the United Kingdom the steps that are taken to purchase a business or merge with one are monitored and must be adhere too. The European Community Merger Regulation oversees the transaction of all mergers and acquisitions. The organization investigates thoroughly the business dealings between the parties involved in either the merger or business acquisition. The proper documentation must be presented as well as the reason for the merger or business purchase. The stakeholder's concerns must be addressed because once the deal is finalized, all company debt and stakeholder's issues are inherited by the new ownership. Employees of the company being the one that is merged into, must be fairly compensated or secured a position within the blended company, re-trained or referred to another company.

Benefits of Synergies Getting Assets at competitive rates More market share R&D of other taken over company/merged Company Removal of a competitor from the competition

Cons With the fear of terrorism ever present each country is exercising caution when it comes to foreign ownership of a business within its country. Through out the UK there is a growing sentiment over allowing too much foreign ownership within the country and company mergers. Certain countries are forbidden to purchase land or purchase any type of business in the UK, for various reasons. There has also been a surge in businesses within the United Kingdom merging with one another and in some cases hostile take overs. The trend of mergers and acquisitions is cyclical and with the banks and other lending institutions refusing to extend credit or make loans, is slowing the merging of businesses down. For some international companies obtaining loans and credit is slowing down, the UK foreign ownership trend but not for long. Mergers and acquisitions is here to stay. Whenever a business is faced with the prospects of a merger, whether it is initiating the offer or another company is looking to merge with it, all of the pros and cons must be considered. While a potential merger might be a good strategic fit or allow a company to expand into new markets, the disruption in business or the difficulties of integration might outweigh whatever synergies are gained.

GoalsTo be able to understand the pros and cons of a potential merger, the first thing that must be understood is the goals of each company. Will a merger accomplish what each company desires? Once the goals of both companies are understood, management can begin to list the pros and cons of the potential deal.

Expansion

Expanding the business is often one of the driving forces behind mergers. For example, if a bank has operations in the Midwest but wants to expand into the seemingly lucrative Florida market, the easiest thing to do is to identify a small regional bank operating in Florida and propose a merger. This merger could provide an instant market presence and an instant customer base to the Midwestern bank. The Florida bank could benefit because it would get access to the large Midwestern bank's efficient operating processes and cheaper capital.

Vertical IntegrationVertical integration is another potential benefit of mergers between suppliers and producers. By vertically integrating a company, the company can control both their upstream and their downstream. They don't have to worry about sourcing raw materials or parts because they own the company that supplies them.

Business IntegrationOn the flip side of gaining market share and improved margins is the huge con of actually integrating the two companies. Due to the differences in systems, processes, and even corporate cultures, companies can have a difficult time getting the two companies to work together.

Business DisruptionAs a result of the difficulties in merging operations, systems, and employees, business disruption can occur. This can take the form of erratic inventory levels, late shipments, and missed deadlines. These disruptions can ultimately affect the company's revenues, margins and profits.

All the Pros and ConsEvaluating all the pros and cons of a potential merger are important for the success of the endeavor. Each situation will be unique but a systematic, thorough approach should be used whenever a company is considering an offer. By understanding the goals of each organization, management will have an easier time understanding whether they should complete the deal. 8. Takeovers occur when a company buys at least 51% of the shares of another company. Using the internet and any other media resources investigate whether there have been any high profile takeovers tat have taken place in the last year. 9. Using the case study and any other examples explain the differences between Horizontal and Vertical Integration. 10. Businesses often acquire other businesses for strategic reasons. Using the case study and any other sources, give reasons and examples why acquisitions may have occurred. 11. When companies want to raise finance, the Gearing ratio is always considered by the various financial institutions. Why might the Gearing ratio be a make or break calculation for a business wanting to borrow money. 12. The Davis Service Group has adopted a decentralized approach to running the group. Why is this essential to its success?

In a centralized organization head office(or a few senior managers) will retain the major responsibilities and powers. Conversely decentralized organizations will spread responsibility for specific decisions across various outlets and lower level managers, including branches or units located away from head office/head quarters. An example of a decentralized structure is Tesco the supermarket chain. Each store of Tesco has a store manager who can make certain decisions concerning their store. The store manager is responsible to a regional manager . Organizations may also decide that a combination of centralization and decentralization is more effective. For example functions such as accounting and purchasing may be centralized to save costs. Whilst tasks such as recruitment may be decentralized as units away from head office may have staffing needs specific only to them. Certain organizations implement vertical decentralization which means that they have handed the power to make certain decisions, down the hierarchy of their organization. Vertical decentralization increases the input, people at the bottom of the organization chart have in decision making. Horizontal decentralization spreads responsibility across the organization. A good example of this is the implementation of new technology across the whole business. This implementation will be the sole responsibility of technology specialists

Advantages of Centralized Structure For Organizations

Advantages of Decentralized Structure For Organizations

Senior managers enjoy greater control over the organization.

Senior managers have time to concentrate on the most important decisions (as the other decisions can be undertaken by other people down the organization structure.

The use of standardized procedures can results in cost savings.

Decision making is a form of empowerment. Empowerment can increase motivation and therefore mean that staff output increases.

Decisions can be made to benefit the organizations as a whole. Whereas a decision made by a department manager may benefit their department, but disadvantage other departments.

People lower down the chain have a greater understanding of the environment they work in and the people (customers and colleagues) that they interact with. This knowledge skills and experience may enable them to make more effective decisions than senior managers.

The organization can benefit from the decision making of experienced senior managers.

Empowerment will enable departments and their employees to respond faster to changes and new challenges. Whereas it may take senior managers longer to appreciate that business needs have changed.

In uncertain times the organization will need strong leadership and pull in the same direction. It is believed that strong leadership is often best given from above.

Empowerment makes it easier for people to accept and make a success of more responsibility.