Decentralization in Organizations

A decentralized organization is an organization where the decision-making is a shared authority within the company, versus only a few top management staff making decisions (Noreen, Brewer, Garrison, 2014). Sometimes this means that top management staff must delegate decision making to other staff members. For example, the CEO of a company cannot be available to make a decision that affects only one employee, such as when to take a lunch break. These decisions must be delegated down to different levels of management.

Joseph (2015) outlines some of the advantages of having an organization with a decentralized structure. By delegating decision-making abilities to lower level management, those employees will gain a sense of empowerment. This empowerment comes from the ability to make company decisions, and have input that affects the company as a whole. An organization with a decentralized structure also allows employees of many different levels to utilize their experience and knowledge towards the implementation of ideas. Another benefit outlined by Joseph, (2015), is that the daily operations and mundane tasks become responsibilities of lower lever management staff, and allow higher level managers the time to do larger responsibility tasks.

Joseph, 2015, also outlines the disadvantages of when companies utilize a decentralized structure for decision-making. By decentralizing the decision-making to several people, there is less control that top management has. By having less control, those top managers must put a lot of trust in the other managers. This is difficult for a person who is a business owner and started the company. It may be a process to relinquish some control in the company that the owner created. Another risk is that the decisions will be made against the benefit of the company due to mismanagement.

Finally, another disadvantage is the possible fragmentation of the company. Before, the company coexisted as a single unit, and after...