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MBA 435 – SEMINAR PRESENTATION

MERITS AND DEMERITS OF CENTRALIZEDAND DECENTRALIZED ORGANIZATION STRUCTURES

Group 13 Members
 Serupepeli Matakasa Student ID No:S93000216 Kavita Shah Student ID No: S11050160
Pita Tuni Turaganikeli Student ID No: S90766710

Presentation Outline  Objectives  Organization structure  Work Specialization  Centralization  Decentralization  Merits/ Demerits of Centralization  Merits/ Demerits of Decentralization  Conclusion/ Reference  Video .

.LEARNING OBJECTIVES • Identify the six key elements that define an organization’s structure • Know the concepts of centralization and decentralization • Discuss the merits and demerits of Centralization and Decentralization.

Organization Structure • Defines how job tasks are formally divided. and coordinated • Key elements to be addressed: – – – – – – – Work specialization Departmentalization Chain of command Span of control Centralization Decentralization Formalization . grouped.

Work Specialization • Division of labor • Describes the degree to which activities in the organization are subdivided into separate jobs • Creates problems when carried too far .

Departmentalization • Basis by which jobs are grouped together – Function – Product – Geography – Process – Customer .

Chain of Command • Unbroken line of authority that extends from the top of the organization to the lowest and clarifies who reports to whom • Authority • Unity of Command principle • Fewer organizations find this is effective .

Span of control • Determines the number of levels and managers an organization has • Trend in recent years has been toward wider spans of control • Wider span depends on employees knowing their jobs well .

Formalization • Degree to which jobs within the organization are standardized .

Decentralization • Centralized Top managers hold most decision-making authority Decentralized Lower level managers hold significant decision-making authority .Centralization vs.

.Merits of Centralization  Senior Managers are given more responsibility.  Important decisions can be made quicker and will be more consistent within the whole organization.  There is more structure and more organization within the corporation.  Important decisions are made at a senior level in head office so the daily operations are not interrupted.

 The rest of the workplace could feel out of placeUnimportant as they are left out of decision making processes. .Demerits of Centralization:  Too Much Responsibility may fall on one or two regional managers.  Branch managers may feel unimportant as they have to consult the superiors with all important decisions This could be demoralizing.

increases their selfconfidence and thus enhances their motivation level.  Facilitates timely decision-making. .Merits of Decentralization  Decision can be taken by lower level managers.  Provide autonomy to employees.  Decisions and strategies can be quickly adapted to the competitive environment.

• The success of a unit will depend on the efficiency and capability of its head. .Demerits of Decentralization • Coordination of decentralized units poses a serious challenge to top management. • Policies are not be applied uniformly across the organization and could be demotivating • Differences in opinions of top management could lead to conflict.

.  It also allows them to make better use of the knowledge and experience they have gained and implement some of their own ideas.Empowering Employees  Employees can be empowered by having more autonomy to make their own decisions.

Movie Example: Apollo 13 What organizational structure does NASA use to handle a moon launch? .

Conclusion • There is no simple answer to the question whether centralization or decentralization is the preferable option for an organization • Decentralization is not a proper solution for all problems. and centralization is not necessarily bad. .

S.com/watch?v=MF0ZxboKL • http://www. Boyle.com/info_8703779_diff erence-between-centralizeddecentralized- .ehow.youtube. Chapter 15( pg 438-455) • www.P. T. Judge.M.(2011)Organizational Behavior . Millett.A.References • Robbins.

Thank You ? .