ARBUS102 Lecture Notes - Lecture 22: Job Satisfaction, Decision-Making, Earnings Before Interest And Taxes
6 Apr 2017
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Week 11: lecture 2 organizational structure and performance. Decentralized: when a single manager or a small management team makes most of the strategic and operating decisions, authority to make important decisions is retained by top level managers, common in small organizations and start ups. Benefits: decision is spread throughout the organization. Disadvantages: lower-level managers may make decisions without seeing the big picture , lower-level manager"s objectives may not be those of the organization, may be lack of coordination among autonomous managers, may be difficult innovative ideas in the organization. Key issues relating to decentralized organizations: clarifying the decentralized segment managers scope of responsibilities: and, deciding how the manager"s performance will be evaluates. To address these issues, business segments are categorized into three types of responsibility centre: cost centres, profit centres and, investment centres. Controls only the cost of operating that segment.
