Q – Read the discussion attached and prepare a Reply to this discussion post with comments that further and advance the discussion topic.
When making decisions about how to structure a company, it is helpful to consider the four
main attributes that most CEOs seek in their businesses: responsiveness, dependability,
effectiveness, and longevity. To ensure that these attributes are met, it is important to consider how
different choices will impact them. Being responsive is all about promptness – knowing how and
when to respond to risks and opportunities. To achieve this, it’s important to have tasks like sales,
procurement, recruiting, and regulatory affairs located at the operating unit level where these
opportunities and threats are likely to occur. Decentralization enables quick responses at any
location. Dependability is key, which is why having common guidelines across operating units can
increase business predictability and align the units with the company’s goals. A centralized unit is
often best suited for overseeing and enforcing adherence to these guidelines and providing staff
with necessary training. Centralization can also lead to efficiency gains by avoiding duplication
and taking advantage of economies of scale. Additionally, certain critical tasks may require a
centralized unit to ensure completion, such as investments in programs with long-term and
unpredictable outcomes, cross-unit arbitration, and decisions to concede defeat and cut the cord
for long-term success. It is important to note that there is no one organizational system that works
for everyone, and changes to a company’s surroundings or strategic objectives may require changes
to its structure. However, less drastic measures such as physically distributing central staff,
designating operational unit representatives at headquarters, and assembling temporary task forces
can also be effective in achieving the attributes of responsiveness, dependability, effectiveness,
and longevity. (Vantrappen & Wirtz, 2017)
To successfully implement analytics across an entire organization, having a centralized
core group of data scientists and analysts is crucial. This team collaborates on various initiatives,
with each member contributing their unique skill set to achieve the team’s overall objectives. A
centralized analytical model provides the team with better oversight of the business, allowing them
to efficiently utilize their diverse skill sets. However, it’s essential to acknowledge that some
analytical tasks may not be suitable for every department, resulting in a sunk expense for a single
team. While a centralized structure may slow down decision-making due to difficulties in sharing
information among management, it fosters stronger decision-making teamwork by taking into
account the viewpoints of all departments. Centralized analytics also facilitates improved
communication and knowledge exchange, as well as team expansion within the data division,
leading to employee growth and progress. By creating their own professional path and
understanding the value they add to enhancing analytics, members of the centralized team can
work towards creating best practices that all departments can adopt to achieve goals and meet
performance targets. However, there may not always be enough time and resources to focus on
each department’s specific objectives while ensuring uniform measurements across the entire
company. (TruOI Operational Intelligence, 2017)
Decentralizing or smart delegation can benefit both the CEO and managers, but cost
duplication and monitoring manager decisions must be carefully considered. Establishing a
centralized team that can provide shared services will prevent activity duplication and promote
standardization and governance for delegated managers, resulting in a controlled and restructured
organization.
References:
•
Vantrappen, H. & Wirtz, F. (2017). When to Decentralize Decision Making, and When
Not
To.
Harvard
Business
School
Publishing. https://hbr.org/2017/12/when-to-
decentralize-decision-making-and-when-not-to
•
TruOI
Operational
Intelligence
(2017).
Centralized
vs.
Decentralized
Analytics. https://www.truoi.com/blog/centralized-vs-decentralized-analytics/
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