Centralised and decentralised businesses
One main thing a business needs to decide is where decison making power is located within the business structure.
The choice between centralised or decentralised is not an either/or choice. Most large businesses necessarily involve a degree of decentralisation when it starts to operate from several locations or it adds new business units and markets to enable easy decison making.
Centralised - The concentration of managment and decison making power is located at the top of a a businesse hierachy, and are handled strictly at the top or the executive level.
Advanatges to centralised businesses
- Easier to implement common policies and practices for the whole business - ensure the whole business is working towards the same goal and can save money by implementing standardised procedures for the whole bsuiness
- Prevents other parts of the business from becoming too independent - Work as a whole business
- Easier to co-ordinate and control from the centre - for example with budgets
- Much quicker usually - easier to show a strong leadership
- Experienced senior managers make decisons - more likely to be benerficial to the company as a whole
- Strong leadership…