‘in This Age of Hyper-Competition Organisations Should Adopt a Decentralised Structure’
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Date Submitted: 05/09/2011 01:24 PM
BE400 Introduction to Management Assessed Coursework Spring 2011
Coursework question:
‘In this age of hyper-competition organisations should adopt a decentralised structure’. Discuss this statement with reference to different types of organisational structures and the factors that determine them.
Name: Dias Omarov
ID: 1005740
Determinism view (Donaldson,1995) is the view that organization’s structure is determined by its environment. High competitive and dynamic environment made organizations to change their conventional structure in order to maintain high performance. To maintain competitive in hyper-competitive environment organizations must develop more competitive new goods and services faster than their rivals. Moreover, managers must consider factors that affect structure in order to organize the company.
The structure of an organization is the sum total of the ways in which it divides its labor into distinct tasks and then achieves co-ordination among them.( Mintzberg,1979).There is strong evidence that decentralized structure of the organization succeed in the past years. This essay analyses factors favored decentralized structure.
In a competitive fast-moving environment essential factor is time because of competition, technology and demand change.Time period in which organization can make decision affects their performance. Eisenhardt (1988), Judge nad Miller (1991) found that there is a strong positive relationship between decision speed and performance. Quick decisions give firms a comparative advantage in launching a new product, firms can quicker adapt to the situation in the market. J.R Baum and S. Wally analyzed relationship of decision speed to environmental and organizational factors. Research suggests that there is positive relationship between decision speed and profits. If firm will adopt new technology faster than their rival the firm will gain an advantage. The Ryanair airline weas quick to spot the advantage of the world...
