In a centralised organisation head office (or a few
senior managers) will retain the major responsibilities and powers.
Conversely decentralised organisations will spread responsibility for
specific decisions across various outlets and lower level managers,
including branches or units located away from head office/head quarters.
An example of a decentralised structure is Tesco
the supermarket chain. Each store of Tesco
has a store manager who can make certain decisions concerning their
store. The store manager is responsible to a regional manager.
Centralised and Decentralised Combined
Organisations may also decide that a combination of
centralisation and decentralisation is more effective. For example functions
such as accounting and purchasing may be centralised to save costs.
Whilst tasks such as recruitment may be decentralised as units away
from head office may have staffing needs specific only to them.
Certain organisations implement vertical decentralisation
which means that they have handed the power to make certain decisions,
down the hierarchy of their organisation. Vertical decentralisation
increases the input, people at the bottom of the organisation chart
have in decision making.
Horizontal decentralisation spreads responsibility
across the organisation. A good example of this is the implementation
of new technology across the whole business. This implementation will
be the sole responsibility of technology specialists