ello Professor and Classmates:
Different firms use very different mixes of vertical specialization, output controls, process controls, and managerial techniques to allocate the authority or discretion to act. The farther up the hierarchy of authority the discretion to spend money, to hire people, and to make similar decisions is moved, the greater the degree of centralization. The more decisions are delegated,or moved down the hierarchy of authority the greater the degree of decentralization.
In a nut shell, centralization is the degree to which the authority to make decisions is restricted to higher levels of management.
Decentralization is the degree to which the authority to make decisions is given to lower levels in an organization's hierarchy.
An organization type such as banks like Fifth Third Bankcorp would benefit from a decentralized hierarchy. President and CEO George A. Schaefer Jr. does not like costly centralized bureaucracy. He built this regional bank from smaller ones and maintains considerable autonomy for each of the 16 affiliate banks composing Fifth Third.
An organization such as McDonald's will not benefit from decentralized but would benefit with centralized because McD has a uniform way of running their business. There is a university for one one to attend to learn the wheels of the trade, such as timing on cooking the french fries, the assembly line in preparing the Big Mac. Closely related to decentralization is the notion of participation. Many people want to be involved in making decisions that affect their work. Participation results when a manager delegates some authority for such decision making to subordinates in order to include them in the choice process.
Reference: p. 399 Organizational Behavior 11e by Schermerhorn, Hunt, Osborn, Uhl-Bien
Different firms use very different mixes of vertical specialization, output controls, process controls, and managerial techniques to allocate the authority or discretion to act. The farther up the hierarchy of authority the discretion to spend money, to hire people, and to make similar decisions is moved, the greater the degree of centralization. The more decisions are delegated,or moved down the hierarchy of authority the greater the degree of decentralization.
In a nut shell, centralization is the degree to which the authority to make decisions is restricted to higher levels of management.
Decentralization is the degree to which the authority to make decisions is given to lower levels in an organization's hierarchy.
An organization type such as banks like Fifth Third Bankcorp would benefit from a decentralized hierarchy. President and CEO George A. Schaefer Jr. does not like costly centralized bureaucracy. He built this regional bank from smaller ones and maintains considerable autonomy for each of the 16 affiliate banks composing Fifth Third.
An organization such as McDonald's will not benefit from decentralized but would benefit with centralized because McD has a uniform way of running their business. There is a university for one one to attend to learn the wheels of the trade, such as timing on cooking the french fries, the assembly line in preparing the Big Mac. Closely related to decentralization is the notion of participation. Many people want to be involved in making decisions that affect their work. Participation results when a manager delegates some authority for such decision making to subordinates in order to include them in the choice process.
Reference: p. 399 Organizational Behavior 11e by Schermerhorn, Hunt, Osborn, Uhl-Bien
No comments:
Post a Comment