I.

CASE TITLE
Ponciano Retailing Company
II. TIME CONTEXT
Present
III. VIEWPOINT
Mr. Ponciano Samonte founded his own organization, Ponciano Retailing
Company, when he was 25 years old. He asked Danny, his classmate's younger
brother, to join him in the business he was just starting. Over time, the company
began to have success in the grocery retail industry. Once Ponciano and Danny
teamed up, one branch after another was built. It has been just over 20 years since 19
different branches opened in the Central Luzon and Cagayan Valley regions. There
were 405 people in the company, and all employees demonstrated a lot of respect for
the abilities of the two trailblazers. The two Poncianos and Danny established a
relationship of mutual trust with each other. To ensure he had all of the information
necessary to run the business, Ponciano sought the advice of Danny. It has never been
a scarcity of managers because Danny has always been occupied teaching staff on
various elements of branch management.
IV. STATEMENT OF THE PROBLEM
Patrick acquired full ownership and control of the business upon his father's
death. Patrick made small steps in the direction of centralization of decision-making.
In the past, the store managers had complete authority to choose the goods, amount,
and the time at which the merchandise was purchased. Training and recruiting of staff
were done by store managers. Danny's power was similarly diminished. Danny had a
depressing effect on the branch managers and employees one month after the
decentralization directive went into effect. There was a two percent reduction in sales,
and a number of key staff began searching for new employment opportunities. The
rate of tardiness and absenteeism began to rise as well. Danny became aware of the
company's possible negative growth and alerted Patrick. When asked why he thought
Danny shouldn't worry, Patrick answered that he feels it is quite simple to replace
people who will depart.
V. OBJECTIVES
1. Determine the employees’ reaction towards Patrick’s Decentralization.
2. Analyze whether decentralization will do good for the business or not.
VI. AREAS OF CONSIDERATION
1. Danny receives an executive salary that was above industry standard, plus
allowances and medical benefits. He is provided with an executive car. He is
authorized to make decisions on operational matters.
2. Within a span of 20 years, 19 branches were established throughout Central
Luzon and Cagayan Valley.
3. As the years passed, the firm made good in the grocery retail business.
VII. ALTERNATIVE COURSE OF ACTION
 1. New management system
2. Company meeting for decision-making
3. Decentralization process
ADVANTAGES of Decentralization
- It helps the organization grow overall
- It encourages accountability and transparency
- It breeds innovation and flexibility
DISADVANTAGES
- It is not ideal for new entrants
- Unhealthy competition
- Work duplication
VIII. RECOMMENDATION
Because the majority of Patrick's workers have been working under the previous
framework, they are finding it extremely difficult and uncomfortable to adjust to the
new management approach. It is difficult to change their attitudes, and any attempts
to do so are met with opposition. A constructive dialogue between employees and
upper management is highly recommended, and Danny should facilitate such a
dialogue in order to provide Patrick with a proper forum in which to explain, present,
and lay out the new policy, as well as for employees to express their thoughts on the
new system in comparison to the previous one.
IX. CONCLUSION
In this instance, decentralization is required in order to ensure efficient operations.
Through it could be difficult for a business owner to make all the decisions, it has
many benefits. A big part of empowerment is providing employees with more
decision-making autonomy, enabling them to have a greater feeling of importance in
the company's overall direction. Decentralizations helps businesses to benefit from
their previous experiences and knowledge. Permitting others to undertake such tasks
allows him to spend more time on other activities, such as doing business with
important clients or planning for future growth. The organization has the opportunity
to retain its autonomy since employees and managers are able to operate
independently. Decisions are made much faster when operated as a decentralized
organization.