Organisational structures!!

     






                        CENTRALIZED
                               &
                   DECENTRALIZED \
       ORGANISATIONAL STRUCTURES

This week we focused on the nature of different organisational structures, for instance whether they are centralized or decentralized, tall or short e.t.c. The picture above is a short but precise definition of a centralized.The arrows in the diagram represent the direction of command.For instance, the arrows pointing towards the person in the center demonstrates a centralized structure as this refers to the power of command and decision making lying solely in the hands of this one person ,who passes them on to the others who are to do as told. This in other words is a very autocratic leadership style.
A living example of a company operating with a centralized structure is APPLE. Apple's large size is one of the main reasons for it being a centralized company as with large size there usually comes an idea of the superior staff of the company to make the decisions and rely on the others to implement on those decisions.For 2012 Apple planned a capital investment of $8 billion, which is a very big investment, therefore such companies making such huge investments do not want to risk there money in the hands of the workers, as a result of which tend to be centralized.However this practice may have a few draw backs as due to centralization through out the company, problems of motivation may arise, or the company may not be able to focus on the market demand for the product in different regions as this demand would vary from place to place. All these problems can lead to inefficiency and may even lead to failure.

While on the other hand as shown in this other picture organisation A is the one with a decentralized structure. In such a structure there are more layers added to the hierarchy, therefore the decision making power is not only in the hand of one person but is spread through out.. An example of an organisation with such a structure is the famous super market TESCO. Each supermarket has a store manager who can make certain decisions concerning areas like staffing, sales promotions. The store manager is responsible to a regional or area manager. Firms following such a strategy are much closely linked to their customers, as they are able to focus on and meet the needs of the customers and give better service to their customers.Also efficiency is increased as the staff stays motivated due to the somewhat decision making authority they are given. However even organisations with such a structure have problems as at times a problem of who the actual leader is may arise , people may not know who to answer to e.t.c.
 As a result neither of the two styles of leadership are perfect on there own as both have there pros and koans. As a result most of the most successful organisations in the world use a mixture of the two and practice a style in which they can get the best out of the two and work accordingly.