...Exercise 2: Centralization vs. Decentralization Identify whether your organization has a centralized or decentralized approach to procurement. My organization has a decentralized approach in which our stores play a big part in procurement. Even though purchasing makes all the decisions on product, the stores and the field operators make the final call. In comparison with other retail chains, decisions are mainly dealt at head office and the field would not have input on what is shipped to stores. Although my department (purchasing) has main control of the procurement process, we still need to advise our stores of what product has been ordered and shipped. When purchasing prepares for an upcoming event, we provide our stores the details of the feature products and recommend how much product they should order. However, stores have the ability to adjust their orders based on how much they can sell/lease. In terms of replenishment, we send an availability report to stores on a weekly basis that breaks down their inventory by idle/on order and identifies if store are over or below their optimal levels by category. This report is a good tool for our stores to recognize any gaps in their inventory and gives them the opportunity to move inventory within other stores and provides them a guideline on what they should replenish. Stores have the ability to order product through our internal ordering system by creating requisitions. The system will automatically approve orders...
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...The Decentralisation policy in Zambia has not performed to expected standards in the recent past. This is according to a baseline survey that was conducted by the Southern Africa Centre for the Constructive Resolution of Disputes (SACCORD). The survey was conducted in four target districts namely: Choma, Itezhi-tezhi, Sesheke and Solwezi though the survey was conducted in two of the target districts (Sesheke and Solwezi). Our staffer ALVIN CHIINGA looks at the survey which focused on identifying actual activities, progress and challenges of decentralisation. ONE of the main aims of the survey was to capture the public’s knowledge, attitudes, practices and perceptions about local governance and decentralisation. This survey took place between February 6 and February 15, 2011. Among some of the observations of the survey were that decentralisation is not reflected as a priority in most instances. It is also not reflected in the current council plans of action. In fact, the research was informed that councils had been waiting for instructions, directives and resources to begin undertaking activities that have been stated in documents such as the Decentralisation Implementation Plan (DIP). According to SACCORD, beyond the structural issue, the survey was able to establish considerable levels of uncertainty among local bureaucratic and political elites on the issue of decentralisation. This was evident in the degree of divergence of perspectives on the subject matter concerning...
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...SECTION 5 CHAPTER 4: ORGANIZATIONAL AND MANGERIAL ISSUES IN LOGISTICS 1. Discuss several issues that influence the organization of logistics activities within a firm. The organization of logistics activities within a firm depends on a number of factors, including the number and location of customers, as well as an organization’s size. The number and location of customers might influence whether a firm adopts a centralized or decentralized logistics organization. An organization’s size might influence the organizing of logistics activities in the sense that there are limitations in the degree of specialization of managerial talent in small firms. 2. Compare and contrast the fragmented and unified logistical organizational structures. In a fragmented logistics structure, logistics activities are managed in multiple departments throughout an organization. In such a structure, it is possible for the various logistics activities to be managed in two, three, four, or more departments. Because effective and efficient logistics is predicated on a high degree of coordination among logistics activities, such coordination can become difficult when the logistics activities are spread throughout an organization. In a unified logistics structure, multiple logistics activities are combined into, and managed as, a single department. The unified structure can be further classified based on the number and type of activities assigned to the department....
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...Introduction Day by day, the decentralization of decision making in present-day organizations is rising. It is an undeniable fact that the decision making tactics have evolved through time and they are beneficial not only for modern day global organizations but also for the employees’ productivity. It is an inevitable approach for that type of organizations as they have several departments across the world, and as for employees, autonomy at making their own decisions leads to motivation and empowerment. Main body International contemporary organizations operate across the world with several departments or divisions and they certainly require a more decentralized structure. A new unit opens in a different geographic region and in order to perform with success, it operates as an independent entity. The reason for this independence comes with the idea that the needs in every region differ. Zoghi and Mohr (2011, p.688) state that ‘as the size and the scope of the business grow, it becomes increasingly difficult to possess and process all the relevant information and make decisions.’ Top managers of a national firm choose to distribute the decision control among employers with lower business position, as these employers know at firsthand what the needs of their working area are. The assigned group of workers can efficiently decide what the best solution to a problem is, what changes need to be made, and adapt to the consumer needs of their area. As far as the employees’ side...
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...Centralization versus decentralization Every organization must establish whether its decision-making policies are centralized or decentralized. Highly centralized companies tend to have more bureaucratic traits, while highly decentralized companies tend to appear more out of control. Both extremes appear engulfed with inefficiencies and waste. High performance work systems seem to have more decentralized decision-making features, yet their culture, formed around their philosophy and values, is highly centralized. Creating a centralized philosophy and value system allows employees to become more empowered to make their own decisions, leading to decentralization. Centralization versus decentralization is an issue of control. Top executives make many decisions in a centralized organization and convey the decisions to managers at lower levels, creating a top-down management style. All divisions and locations are expected to adhere to policies and procedures approved by top-level managers. While this may seem like all employees are expected to conform to one way of thinking, stifling creative problem solving, centralization creates streamlined processes and allows the entire organization to utilize the same resources throughout the company. This can create process efficiency, but centralization typically does not allow employees to make and implement their own decisions without approval from levels higher up. Decentralization is characterized by relatively few layers...
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...of the future and point out that decentralization is usually conducive to superior patterns in decision-making In a centralized organization , all decisions come through a single chain of command . The manager always knows who to report to and in what hierarchy this or that question will be resolved , at least ideally . This clear pattern is fuzzier at a decentralized organization where decision-making is dispersed through a number of different channels and occurs in a less strictly regulated manner . This difference has also to do with information management as information can rise up a single line as in centralized organizations , or flow according to a more complex pattern , according to the decentralized one . Centralization is connected with a narrow span of control and a tall hierarchy in contrast decentralization is associated with a flat hierarchy with a wide span of control (Simon 1994 , .34 This will argue that decentralization is a visible trend in modern organizations , although it cannot be expected to replace all centralized organizations in the short run . Corporate revamping is a slow and painstaking process , and centralized governance does have advantages However , the `fashionable ' customer focus and the need for flexibility that come to the fore in today 's business as well as other trends give managers reason to switch to decentralized patterns . The first sections deal with advantages brought by decentralization and the factors that lead to the...
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...Decentralization, deconcentration and devolution: what do they mean?1 Compiled by Elizabeth Linda Yuliani2 Decentralization with its various types has been implemented in many countries, and the terms have been widely used. However, the same word is often used to describe different things. Interpretations vary, and have led to different conceptual frameworks, programs, implementation and implications. Such differences have invited debates and discussion. This document lists definitions of decentralization, deconcentration, devolution and other related terms used in papers presented at the Interlaken Workshop on Decentralization, 27-30 April 2004, Interlaken, Switzerland. As this is a work in progress, there may be many parts needing improvement/changes. We look forward to receiving your comments and suggestions (L.yuliani@cgiar.org). Decentralization Definitions and descriptions of decentralization used in the papers include: • “Decentralisation is usually referred to as the transfer of powers from central government to lower levels in a political-administrative and territorial hierarchy (Crook and Manor 1998, Agrawal and Ribot 1999). This official power transfer can take two main forms. Administrative decentralisation, also known as deconcentration, refers to a transfer to lower-level central government authorities, or to other local authorities who are upwardly accountable to the central government (Ribot 2002). In contrast, political, or democratic, decentralisation refers...
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...A decentralized organization is one in which decision making is not confined to a few top executives but rather is throughout the organization, with managers at various levels making key operating decisions relating to their sphere of responsibility. Decentralization is a matter of degree, since all organizations are decentralized to some extent out of necessity. At one extreme, a strongly decentralized organization is one in which even the lowest-level managers and employees are empowered to make decisions. At the other extreme, in a strongly decentralized organization, lower-level managers have little freedom to make decisions. Although most organizations fall somewhere between these two extremes, there is a pronounced trend toward more and more decentralization. Advantages/Benefits of Decentralization: Decentralization has many advantages/benefits, including: 1. Top management is relieved of much day-to-day problem solving and is left free to concentrate on strategy, on higher level decision making, and coordinating activities. 2. Decentralization provides lower level managers with vital experience in making decisions. Without such experience, they would be ill-prepared to make decisions when they are promoted into higher level positions. 3. Added responsibility and decision making authority often result in increased job satisfaction. Responsibility and the authority, that goes with it makes the job more interesting and provides greater Incentives for people to put out...
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...In our DNS case, each of those offices may keep up and control its own particular DNS server, being in charge of keeping up the ability set to keep focused of the innovation as it changes, to modeler the frameworks as it sees fit, and to screen the administration. Organizations can structure IT in a centralized or decentralized way. Centralization is an attempt to enhance proficiency by taking advantages of potential economies like enhancing the average; it might also reduce the occurrences of any mistakes. Decentralization is an attempt to enhance speed and adaptability by redesigning to build neighborhood control and execution of an administration. Decentralization implies splitting against the disappointing bureaucratic methods of old and giving access to everyone. For example, it implies somebody has turned out to be so disappointed with an incorporated administration that "do it yourself" has the capability of being better. In the current environment decentralization is regularly an intentional reaction to the quicker pace of business what's more, to client desires of expanded independence. In centralization different groups are pulled together to enforce order of the process and cooperation between them. It is a leveling process. It looks for to evacuate the misuse of cash on copy or duplicate systems, additional work and manual procedures. New innovation ideal models frequently bring opportunities for...
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...The Marketing of Accounting Standards The article “The Marketing of Accounting Standards” by Charles T. Horngren speaks of the decentralization of the Accounting Principles Board. He describes the institutional structure of the APB, speaks of the decentralization management, and the problems facing FASB. The institutional structure of the APB is decentralized, as previously mentioned, which leads to an “informal” organizational relationship. Horngren believes the APB folded because of institutional forces rather than internal disintegration (Horngran 61). He states that in politics Congress has the ultimate power, but delegates some of it to the SEC. In turn, the SEC delegates much of this power to the APB. He speaks of the SEC as a “top management” where they adopt decentralization because lower management, the APB, is believed to have more information and ability to make decisions. With this statement though, Horngren received criticism from an SEC member stating they have a “partnership,” (Horngren 62). Horngren believes that, “the need to study how the exercise of power affects the acceptability of accounting standards,” (Horngren 63). Working as a decentralized management has proven to be difficult as well. The issue with marketable securities is one example. Three issues have occurred: recognition of portfolio gains and losses, do the portfolio gains and losses belong in the income statement, and if market values are disclosed in the balance sheet than there’s...
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...of how the multinational corporations are managed, especially the differences between organizational structures of Ford and Honda will be discussed. The background of a multinational corporation is an organization doing business in more than one country. In other words it is an organization or enterprise carrying on business in not only the country where it is registered but also in several other countries. It may also be termed as an international corporation, global giant and worldwide corporation (Shyam Soni, 2012). Ford is one of the earliest international companies in the world. They organize their company with a really wise way – decentralized decision-making. It is generally seen that there are more and more plus points of decentralization for decision-making. It is said by Kuldeep (2012) that decentralized decision-making helps to reduce burden of top executives and they can concentrate to another important tasks of policy-making, coordination and control. He also states that prompt and more accurate decisions can be made near the point of action without consulting higher levels and without waiting for approval of top executives. In the other side, Ford, individual companies have the right to make autonomic decision depends on the regional executive’s view of local demands. Each area has different demand and taste. Thus, this organizational structure can work smoothly to help the corporation understand more the consumers and satisfy their needs easily. Honda – a Japanese...
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...As we can see in Kooistra’s example, there are some prerequisites to decentralising an organisation, such as a performance reporting system, bottom-up budgeting leading to accountability, and an incentive system. Many organisations nowadays are run by such methods However, the optimum structure may vary according to company, for which there might be several reasons. In this essay, I try to analyse which aspects of centralisation and decentralisation can enhance the function of a particular organisation. I set out various organisational circumstances, and then assess which types of companies are appropriate to be centralised. It has been argued that centralisation has to do with the locus of authority to make decisions affecting the organisation. It can also refer to the tools to measure the degree of centralisation ‒ how many decisions have to be referred to headquarters or to a parent organisation (Pugh et al,, 1968, p. 76)? From this point of view, centralisation can be regarded as the degree to which decision making is confined to the upper levels of the organisation. In a small organisation, decision-makers can make decisions well and efficiently; they can set goals by themselves, communicate them to the employees and properly evaluate performance, because they are able to acquire information and communicate with employees directly. In other words, centralisation can operate well in a small company, as the upper levels of the organisation are able to be aware of issues throughout...
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...Centralized Verses Decentralized: A Tale of Two Structures Leroy Dowdy Walden University Dr. Gayle Grant 08 April 2012 Centralized Verses Decentralized: A Tale of Two Structures The history of information technology (IT) has been well documented over the previous decades. The contributions of IT vary, but perhaps the most notable is the influence on organizational structuring. Prior to the information age, organizations predominately operated within a centralized structure (Mukherji, 2002). In a centralized structure, decision-making resided at senior levels and was executed within a formal structure. Conversely, a decentralized structure distributes decision-making in an informal environment. The centralized structure was effective, in part, due to decision-making authorities being reserved for upper management (Hitt & Brynjolfsson, 1997). The two case studies presented excellent examples of how organizational structure influences the use of IT. The use of social action theory to frame the research was insightful. Social action theory suggests that organization’s structures are based on traditions, policies, and habits, but may change if any of these factors are changed, replaced, or not acted upon (Giddens, 1984). This author will examine the challenges faced and the strategic responses implemented by both universities. Challenges and Strategic Responses The maturation of IT made the handling, sorting, and storing of hard copy documents obsolete. The...
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...not have to consult their subordinates. On top of that, with centralized organizational structure, conflicts and long-stretch arguments with subordinates could be avoided and this will not distort the business operations. Centralized business structure is most suitable for small organization because of its small number of employees and capital to run the business. To implement decentralized organization it requires more employees and higher cost will have to be incurred. This is something that small organizations cannot afford to have. Furthermore, it is not necessary for them to implement decentralizations, as the business operation is simpler rather than complex. Unlike big and established organizations, they are more diversified and require different skills and expertise for different products or departments. Therefore, it is more appropriate for big organizations to have decentralization so that customer’s demands can be...
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...------------------------------------------------- Key Issues 1) Implementing an innovative growth strategy that can achieve expected growth, while maintaining a value based employee model. 2) Cervus’ future approach in the execution of a diversification growth strategy, in the construction and industrial equipment markets. 3) Evaluating growth potential in international markets and the vehicles present. 4) Responding to IT environmental complexities alongside available partnerships which to work with. 5) Growing products and service capabilities to clients and optimize operational requirements. ------------------------------------------------- Analysis Internal Analysis (VRINE) – Decentralization and ‘Principles over Policy’ The following VRINE analysis will determine whether Cervus’ decentralization capabilities, namely the ‘principles over policy’ approach, provide a sustainable competitive advantage. Value Empowering dealership employees to formulate and implement growth strategies have provided a substantial amount of value for Cervus. Decentralized, value-based decision making gives front-level employees the power necessary to make critical customer service decisions without referring to corporate policy or waiting for a manager’s assistance. In addition, this discovered process approach has created an autonomous workforce, able to adapt quickly to new situations. Conversely, centralized decision-making can create ‘cold-hearted’ employees who are forced to resort to and...
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