Business
Study Notes
Decentralised structures
- Level:
- AS, A Level
- Board:
- AQA, Edexcel, OCR, IB
Last updated 22 Mar 2021
In a decentralised organisational structure, decision-making is spread out to include more junior managers in the hierarchy, as well as individual business units or trading locations.
Good examples of businesses which use a decentralised structure include the major supermarket chains like WM Morrison and Tesco. Each supermarket has a store manager who can make certain decisions concerning areas like staffing, sales promotions. The store manager is responsible to a regional or area manager. Hotel chains are particularly keen on using decentralised structures so that local hotel managers are empowered to make on-the-spot decisions to handle customer problems or complaints.
The main advantages and disadvantages of this approach can be summarised as follows:
Advantages | Disadvantages |
Decisions are made closer to the customer | Decision-making is not necessarily “strategic” |
Better able to respond to local circumstances | More difficult to ensure consistent practices and policies (customers might prefer consistency from location to location) |
Improved level of customer service | May be some diseconomies of scale – e.g. duplication of roles |
Consistent with aiming for a flatter hierarchy | Who provides strong leadership when needed (e.g. in a crisis)? |
Good way of training and developing junior management | Harder to achieve tight financial control – risk of cost-overruns |
Should improve staff motivation |
You might also like
Organic vs Mechanistic Organisational Structures
Study Notes
Centralised structures
Study Notes
People Management: Decentralisation (GCSE)
Study Notes
People Management: Centralisation (GCSE)
Study Notes
Centralised and Decentralised Decision-making (Revision Presentation)
Study Presentations
Centralised versus decentralised structures
Study Notes
Zappos and Holacracy - the Ultimate Flat Organisational Structure?
19th February 2014
Recommended

Exam support for 2022
Online Grade Booster Courses for A-Level Exams in May & June 2022
Exam technique, advance information support, live revision and more from the tutor2u subject specialist teams