When is decentralization desirable for an organization?

"Several factors must be considered when deciding how much decision-making authority to delegate throughout the organization. These factors include the size of the organization, the speed of change in its environment, managers’ willingness to give up authority, employees’ willingness to accept more authority, and the organization’s geographic dispersion. Decentralization is usually desirable when the following conditions are met: • The organization is very large, like ExxonMobil, Ford, or General Electric. • The firm is in a dynamic environment where quick, local decisions must be made, as in many high-tech industries. • Managers are willing to share power with their subordinates. • Employees are willing and able to take more responsibility. • The company is spread out geographically, such as Nordstrom, Caterpillar, or Ford. As organizations grow and change, they continually reevaluate their structure to determine whether it is helping the company to achieve its goals. C O N C E P T C H E C K 1. What are the characteristics of a centralized organization? 2. What are the benefits of a decentralized organization? 3. What factors should be considered when choosing the degree of centralization?"