Decentralized organizational structures distribute responsibility among departments or individuals, allowing for faster growth, increased employee satisfaction and creativity, and more practical decision-making. It also simplifies management, while centralized structures rely on a single authority figure.
A decentralized organizational structure distributes responsibility for day-to-day management among different departments or individuals, rather than depending on decisions made by one authority figure. It gives more power to the lower levels of an organization so that executives have the freedom to focus on the core issues facing the company. Companies that follow a decentralized organizational structure are often less likely to adhere to strict guidelines or policies.
One of the major benefits of the decentralized organizational structure is that it allows an organization to grow faster. When decision making is distributed among multiple employees, problems can be resolved quickly and more frequently. It also allows executives to focus more attention on key issues, thus accelerating the process of implementing important initiatives that can result in major changes in an organization.
The decentralized organizational structure can help increase employee satisfaction and retention. Employees who hold more responsibilities tend to have more pride in their work. They often work most efficiently when they feel the executive team trusts them and depends on their efforts.
The decentralization structure can also encourage more creativity among employees. By giving workers the freedom to make decisions, managers can encourage them to experiment and think outside the box. Without strict policies to curb innovation, employees are more likely to use their ideas to help grow the company.
The decentralized organizational structure can also increase the practicality of new actions. When decisions are made in smaller groups, they are often more logical because their impact is more clearly understood. It is typically not easy for an executive to make policy changes for an entire company, as it is not possible to have the same understanding of the day-to-day operations of each team or employee that would be affected.
In a decentralized organization, it can also be easier to manage the business because you only need to manage a number of groups rather than each employee. By giving different teams the ability to manage themselves, supervising employees is less complicated. Teams run themselves, and executives just need to make sure those teams are running well.
The centralized organizational structure is the more traditional opposite of decentralization. It is a system whereby managers are responsible for decision making and delegation of responsibilities. This system generally also depends on the figure of authority who imposes decisions with coherent and rigid policies.
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