Decision-Making Hierarchy "Are you on the bottom?"

In my last post I discussed delegation and the performance of tasks as part of the decision making hierarchy.  I started with delegation first because it is the most often hardest part of the decision making hierarchy.

Assigning tasks is the first step in the decision making hierarchy with any organization.  Two key elements to assigning tasks are responsibility, which is the duty to perform the assigned task and authority, the power to make the decisions necessary to complete the task.  Organizations often do not have problems assigning responsibilities to their employees; however they are often reluctant to give authority.  This can cause inconsistency which may result in the inability to make quick decisions or provide timely solutions.

The responsibility of performing tasks and authority to make decisions varies depending on organizational structure.  For example, in a centralized organization such as McDonalds’ top management retains the right to make most decisions, and top management must approve lower-level decisions before they can be implemented.  With McDonalds operating such a vast number of franchises their centralized organizational approach allows for standard procedures to be maintained at all locations.  However, when decisions are needed to be made in regards to marketing, staffing and other key elements to the franchise approval must come first from upper level management.

Contrary to the centralized organization model a decentralized organization allows lower and mid-level managers to make significant decisions.  This structure allows companies to be more responsive in their environments and breaks the company down into more manageable parts where they have a greater deal of authority with making decisions for their respective units.   This structure can work quite well if the right staff in place.  It allows managers and business unit teams to be innovative when thinking of their product or service and how to improve upon it.  With a decentralized model the company is much more dependent on its people rather than a centralized organization where all decision making is driven by top management. 

Whether or not centralized is better than decentralized I dont know if that can be determined because a lot depends on the organization's structure and culture.  However, I would personally rather be part of a decentralized organiztion which I am.  The ability to be innovative and have the ability to make decisions for our project appeals greatly to me.

“Is your company a centralized or decentralized organization and does it work well for you?”