Why Is Decentralization of Decision Making Becoming More Common in Contemporary Organizations?

“WHY IS DECENTRALIZATION OF DECISION MAKING

BECOMING MORE COMMON IN CONTEMPORARY

ORGANIZATIONS?”

The world has been, is and will be structured with all kinds of organizations,

with hierarchies, rules and standards. The fact that changes with time is the way

they function. In the past, there was lack of qualified and competent personnel, thus

organizations used to have a strictly centralized structure which helped them to deal

with the necessities of their time and fulfill their goals. Taking into account that in

previous eras communication and access to information had limits that are

inconceivable today, centralization of decision making by following uniform policies

and standardized procedures was compulsory (Vitez, O. 2009).

But nowadays, both communication and access to information are almost

unlimited at all levels of hierarchy of an organization. However, while we are going

through the second decade of the 21st century, where everything changes more

rapidly than ever before, organizations face different new challenges and fastgrowing and changing demands. In order to address the aforementioned difficulties

effectively, organizations are expected to be more adaptive and flexible. Specifically,

in our contemporary society, expansion of all kinds of organizations is quintessential

and their ever increasing size creates an imperative need of onsite decision making.

Additionally, decentralization results in lowering the reaction time to

innovations or changes in the customers’ demand, with more suitable response to

problems faced and more optimized solutions (Chand S. 2015). The most striking

example of our time is the internet. The way it connects and communicates with

networks, websites, users etc. is based on a decentralized structure.

Furthermore, the benefits of a decentralized organizational structure are even more

obvious in large scale organizations with multiple divisions (Wong, E.M. Ormiston,

M.E. and Tetlock, P.E....