Centralisation

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Centralisation

Advantages

  • consistent policies on marketing and production means greater control and standardisation of procedures
  • decisions can be made quickly without the need to consult with all branches or sections
  • every branch of retail business is the same meaning that customers know exactly what to expect
  • it enables tight financial control, the efficient use of resources and lower overheads
  • the corporate view can clearly be emphasised

Disadvantages

  • the manager of a local branch may have far better kowledge about consumers needs, but has little input in the decision making process
  • the lack of decision making powers of local managers may adversely effect their motivation
  • it can lead to inflexibilitiy and inapproproate decisions at local level may also lengthen the decision making process

Evaluation

Organisations that keep their decision making power firmly at the top of the hierachy

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