Centralisation & Decentralisation Flashcards Preview

Business A - Level > Centralisation & Decentralisation > Flashcards

Flashcards in Centralisation & Decentralisation Deck (7)
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1
Q

Centralised Structure

A

All decisions come from one place e.g top of hierarchy

2
Q

Decentralised Structure

A

Decision making is shared/passed onto different profit centres / departments / stores

3
Q

Advantages of a Centralised structure

A
  • Lower costs
  • Consistent
  • Quick decision making
4
Q

Disadvantage of a Centralised structure

A

Not able to respond / tailor to local market

5
Q

Advantages of a Decentralised structure

A
  • Managers empowered / valued / motivated

- Tailored / better suited to locals

6
Q

Disadvantage of a Decentralised structure

A
  • Lacks consistency
7
Q

Analyse how moving from a centralised structure to a decentralised structure might affect the profit of a business

A

Increase - Each individual store is buying its supplies, not benefitting from economies of scale
Increase - Empowered Managers - Manage resources correctly - Less wastage with low shelf - life, AND Motivation - Low labour turnover - Low recruitment & Selection and Training Costs
Decrease - Empowering Managers - Need Training - Increase costs - Decrease Profit