Pros and cons of decentralized organizational structure

Dec 29,2022
Pros and cons of decentralized organizational structure

A healthy enterprise is like a living organic body. Each department performs his duties, but work together. Management coordinates these institutions or departments, but this coordination can be top -down things. The decision -making by the authorized individuals can be decentralized. In the organization under power, decision -making is less from senior management personnel, and more through grass -roots managers of various business departments. In this article, we will explore the advantages and disadvantages of decentralized organizational structure.


What is decentralized organization?

The organization under power is defined as an organization that makes most important decisions on middle and low -level managers. Decentralization organizations usually have the following characteristics:

Because the subordinate managers have power on their departments, there are power decentralized in the organization.

The opinions of employees have been greatly considered during the decision -making process.

Middle -level managers can independently formulate and implement decisions.

The highest management of the organization pays more attention to permanent and long -term decisions.

Power in the organization is usually used to decentralize power and ensure the smooth operation of the department. Most organizations decentralize decision -making power to speed up the decision -making process. Generally, the decision -making in centralized organizations requires time because they must be approved by the highest management of the organization, which usually takes a lot of time. Through power decentralization, managers can decide on the affairs of their departments and perform solutions without waiting for any license or approval.


How does decentralized organizational structure work?

The structure under power encourages high -level managers to put more power to the underlying managers. In other words, lower -level managers have more participation and responsibility in decision -making.

High -level managers focus on strategic decisions, while low -level management personnel focus on less important aspects. For example, executives formulate decisions on vision, mission and strategic plan. At the same time, they handed over the remaining decision to the lower managers and asked them to be responsible for daily operations.

Then, in order to ensure the effective operation of the organization, high -level managers rely on rules, procedures and control to establish a control system. Therefore, even if their power is reduced due to authorization, they can still ensure that the organization is running in accordance with their due way.

High -level managers deepen power as a way to motivate the company's personnel. Therefore, they put their power to their subordinates. In this way, it not only reduces the workload of high -level managers' decision -making, but also encourages subordinates to be more active. Therefore, they have enough space to manage and determine their working area. They also have the opportunity to realize and develop themselves and improve their ability.


Why choose decentralized organizational structure?

A centralized structure is usually not suitable for companies operating in a dynamic business environment. The environment is changing rapidly, and decisions need to be made immediately. Similarly, when local decision -making is vital to support competitiveness (such as in multinational companies), decision -making may be concentrated in high -level managers.

On the other hand, you can make decisions faster by entrusting decision -making to lower levels. And they are more in line with local situations because they are selected by the closest to the manager.

In addition, as the company's scale is getting larger and larger, the operation has become more and more complicated. Many decisions must be made. If the company will concentrate on a few (senior management), this will become impossible. The quality of decision -making may be a problem, because high -level managers bear heavy workload and handle many decisions. Or, even if they make the right decision, it may be bad to implement it because they have no time to supervise the decision of the lower managers.

Employee development and incentives are important reasons for decentralization under power. Grass -roots managers have the opportunity to achieve self and development by participating in decisions. Finally, ability increases. In short words, the decentralized structure enables the company to prepare sufficient capabilities for lower -level management personnel. Therefore, capabilities have been improved at all levels and met the needs of organizational development.


The advantages of decentralized organizational structure

Dedicated business organizations allow flexible daily operations. The following are the four main advantages of decentralization. These advantages have attracted some companies to adopt this management structure:

1. Power decentralization can lead to employees to empower. Through the granting department and the decision -making power of the project manager, the highest management provides trust votes and recognition of these managers' ability.

2. Decentralization organizations can exist in multiple geographical locations. If a company grants strategic planning rights to self -sufficient local managers, it can carry out business at the same time in multiple geographical locations.

3. Disted systems promote flexible response. Different from top -down organizations, decentralized organizations do not need high -level managers to sign each decision. This effective control enables managers at all levels to work decisively and quickly make decisions as needed.

4. Decentralized business can embrace the core competitiveness of stakeholders. Just because someone is a senior manager, it does not mean that they are all experts that the company has done. In contrast, the person in charge of most departments has real professional knowledge in their supervision departments. When the person in charge of these departments is allowed to make their own decision, the company ensures that the people who know the most is the person who is a plan.

5. Employee dedication. Employees who feel that they have the right to speak for the company's decision -making will be more put into work. Their morale is higher, and their positive attitude has a good impact on your company. They are more willing to stay in their jobs longer, so as to save you training and staffing costs.

6. Real -time decision. When employees and subordinate managers must obey their superiors, your company may postpone important decisions without superior management personnel. Diversified management enables your employees to make strategic judgments to avoid slowing down and missing opportunities. The decentralized management structure allows employees to think quickly and make decisions on emergency matters without waiting for the approval of higher -level management. Employees can even help each other in emergencies. These crosses provide the necessary extra flexibility for your company to adapt to unpredictable situations and effectively compete for curved balls.

7. Sharing knowledge base. Your employee and department manager is immersed in the company's operation, and they have a deep and diverse view of your products and operations. The decentralized management structure allows you to learn from their opinions and experience to improve the company's overall intelligence level. Power delegation under management power does not depend on the views of limited people who may not participate in specific details, but use a rich workplace knowledge base.


Disadvantages of decentralized organizational structure

Although the decentralized tissue structure has all advantages, it is not suitable for all business applications. The following are the three disadvantages that corporate leaders should consider under power:

1. Decentralization rarely helps small enterprises, especially startups. Most startups have very few product lines, and their teams are streamlined. These companies need a strong central leader to lead the decision -making process. Only in the future, when the new business is developing and bringing many new employees, can power decentralization play a role.

2. Decentralization under power often involves layoffs. When many business departments are half -autonomous, they may lead to duplication of characters and processes. In contrast, centralized organizations may be more streamlined.

3. Establishing corporate unity may be challenging. Decentralized enterprises face the risk of almost no common ground and lack of common identity in multiple business departments. If entrepreneurial entrepreneurs or senior managers need a more unified team, they may want to turn to a concentrated model.

4. Tedication of process. It may take time to make strategic decisions with decentralized management structure because there may be a variety of voices. This series of views may provide you with higher quality information, but it may also make it more difficult for you to decide the best action plan.

5. Lack of clarity and low efficiency. When more than one manager or employee has the right to make a decision, ordinary employees may not know who to hear. Different managers may provide different answers to the same question, causing confusion and potential conflicts. Without a clear command chain, companies may be difficult to complete tasks. Clear leaders can easily simplify tasks and startup processes, and common decisions may be troublesome and slow. If employees or managers do not agree to take action, they may waste time trying to let colleagues participate or continue to perform wrong tasks.

6. Easy to avoid. When your employees are involved and proactive, the management effects of power decentralization are very good, but employees who tend to avoid responsibilities and difficult tasks may be easier to escape their duties when they are not responsible for a single authorized boss. Having an experienced and well -trained crew will increase your chances of success when implementing management power.

7. Reduce and blind spots: When multiple employees have the right to make the same type of decision -making, you will face the risk of repeating tasks and waste of the energy that can be used for more urgent transactions. Communication is necessary for avoiding unnecessary tasks and ensuring all tasks covering all tasks.

8. Inaccurate command chain: The decentralized management structure may cause confusion who is responsible for each task and who has the right to make the final decision on the project. This lack of clarity may lead to self -negative and power struggles, or employees and managers may lose efficiency because they delay each other to avoid potential conflicts.


Use the advantages of decentralization

The success of the decentralization of management power depends on the creation of a corporate culture. In this culture, decision -making can be carried out at multiple levels, and errors will become an opportunity for growth. Some strategies of effective decentralized management include:

Clarify task authorization. Multiple levels of management and decision -making in the organization do not necessarily mean that conflict and overlap are inevitable. Clear and strategic authorization work so that different managers can understand their fields and respect the autonomy of other managers and decision makers. Provide clear information for employees to explain who can deal with which type of problem.

Comprehensive training. When more workers and managers have the right to make a decision, your training system should be strong enough to teach employees what they need to do to effectively meet these improved expectations. The training should cover the actual details of the work that are being executed and the management skills that assign work and motivate employees.

Effective communication. In order to minimize friction and overlap, the development of systems and expectations for communication in the decentralized management system. Acts for how to convey emergency and secondary information formulation and formulate channels for solving conflicts and misunderstandings.


The successful factor of decentralized management

The decentralized management structure depends on high -quality training so that employees know how to make judgments under pressure. Training can cultivate skills and confidence, which is the two basic elements that enable employees to strengthen and make full use of the decentralized paradigm.

Although decentralized management depends on the input and knowledge of multiple levels in the organization, employees and managers should still clearly understand their job responsibilities and ask who should ask for help when needed. This management style needs to be continuously studied, depending on some colleagues present to help supplement and expand employees' knowledge base. In addition, employees should be encouraged to seek guidance when needed, rather than making a decision to understand higher levels of understanding.


Limitation of decentralization under power:

Decentralization has certain disadvantages and limitations, as follows:

(1) Increase administrative expenses:

The management cost is increased under power, because it needs to hire a well -trained personnel to accept power. The services of these high -paying personnel may not be fully utilized, especially in small organizations.

(2) The product line that requires attention is wide:

Power decentralization requires the company's product lines to be wide enough to allow the creation of autonomous units, which is impossible in small companies.

(3) Found problems in the coordination of each unit:

Power decentralization may bring problems to the coordination between different units.

(4) Bring inconsistency and uncertainty to the company:

Power decentralization may bring internal inconsistencies. For example: different organizations and departments may not follow the unified procedures of the same type of work.

(5) It cannot be achieved due to external reasons:

Due to external factors, power decentralization may not be realized. If a company is affected by uncertainty, it will not be able to meet these uncertainty under the condition of power.

Delivery needs to achieve a balance between the necessary power decentralization under important management functions and the creation of certain facilities:

First -managers who must bear the operation of independent business units must be cultivated.

Secondly -the coordination and communication between the units must be stipulated.

Finally -decentralization under effective power needs to be fully controlled. Unless high -level managers have a comprehensive operating performance measurement system, it is difficult to achieve effective decentralization.



What is the difference between centralized and decentralized structures?

The centralized structure has a unified management, allowing all decisions to progress along the level. The decentralization system is different. It involves the decentralization of power and is responsible for decision -making and execution by the middle and lower managers.

What are the characteristics of decentralized organizations?

Differential tissues have different characteristics. Some of them are; considering power decentralization and subordinate opinions during the decision -making process.

What are the examples of decentralized organizations?

An example of decentralized structure is Google. The organization has different departments, led by various managers, and they all work under the highest management system.

What are the advantages of decentralized organizational structure?

There are several advantages of decentralized organizations. Some of them are: fast decision -making process and implement relevant policies, because managers are familiar with the exact problems of the grassroots and increase output, because employees are recognized and motivated.


The above content introduces the advantages and disadvantages of decentralized organizational structure. Each company must choose the management structure that is most suitable for its overall organization, and most companies have a little centralized and decentralized in their structure. The key to successfully managing any type of organization is to use the balance of centralized and decentralized structures. It must clearly define which decisions will be responsible for the highest management, and how much independence should be given to the local sector to make full use of the advantages of the centralized organization.