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What to do: Discuss the difference between centralized and decentralized organizations

Accounting Nov 20, 2020

What to do:

Discuss the difference between centralized and decentralized organizations. Does the size of the organization influence whether the organization has a centralized or decentralized structure? Explain.

Discussion Board Instructions Summarized:

The initial discussion board post will need to be a minimum of 100 words. The initial post is worth 12 points.

After you type your initial post, read through the other entries and reply directly to at least two classmates on a different day than your initial post. Each response is worth four points. The response posts need to be at least two-three complete sentences. When you reply, please type the name of the classmate you are responding to, provide a welcome message to that person, and type your name at the bottom of the message.

For all posts make sure to use proper grammar, capitalization, (I instead of i) and punctuation in this college level course in all correspondence. Please avoid “text” or “twitter speak” when corresponding.

Expert Solution

The difference between Centralized and Decentralized organizations is the location of where the major decisions are made.  Centralized organizations are structured such that the majority of all decisions, spanning multiple segments, are made at the top level of the administration.  The CEO, President, COO, and CFO, with guidance from the board of directors, are the nexus of decision makers in this structure.  In a Decentralized organization the same people listed previously would produce the strategic plan, but Vice Presidents or segment managers would be responsible for the decisions, operations, and adjustments needed to both implement and reach the strategic plans set by the former.

The size of the company can have an impact on the type of structure the business uses.  A small sole-proprietorship would have a difficult time operating a decentralized structure as it may not be able to afford to have multiple mid-level managers and may not have the need for a decentralized structure.  On the other hand, a large and complex company can still successfully operate under a centralized structure.  It depends on the market, product/service, and fluctuating demand of the consumer as to what type of structure would be most beneficial and sustainable by the company.

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