Question

Characterize businesses you have worked for as either centralized or decentralized. Why did you choose that characteristic?

Answer 1

There are two types of business structures. One is centralized and another one is decentralized.

A Centralized organization is one where one person or head office(usually the top management) takes all the crucial business decisions on behalf of the company. The key decision maker gives direction to the other departments/divisions. However, in a decentralized organization, most of the decision are made by the middle- level managers and even the lower level managers, instead of top managers.

Example of centralized organization is: A small restaurant run by a family. there are limited people usually the family members who are managing the activities inside the restaurant.

Example of decentralized organization: A manufacturing company with separate departments like Finance, Purchase, sales, marketing, Human resources, Technical, Legal, Operations department, Support Department. In this type of company, there is a departmental head in each department who makes the decision for his/her department.

Please feel free to comment if further explanation required..