Among the major drawbacks of highly centralized organizational structure is that it __________.
A) allows top executives to retain authority for most strategic and operating decisions.
B) is based on strict enforcement of detailed procedures backed by rigorous managerial oversight as the most reliable way to keep the daily execution of strategy on track.
C) allows for tight control from the top that makes it easy to fix accountability when things do not go well.
D) relies on the assumption that most company personnel have neither the time nor the inclination to direct and properly control the work they are performing and, further, that they lack the knowledge and judgment to make wise decisions about how best to do their work.
E) can lengthen response times by those closest to the market conditions because they must seek approval for their actions
E) can lengthen response times by those closest to the market conditions because they must seek approval for their actions
In a highly centralized organization structure, top executives retain authority for most strategic and operating decisions and keep a tight rein on business-unit heads, department heads, and the managers of key operating units; comparatively little discretionary authority is granted to front-line supervisors and rank-and-file employees. The command-and-control paradigm of centralized structures is based on the underlying assumptions that front-line personnel have neither the time nor the inclination to direct and properly control the work they are performing and that they lack the knowledge and judgment to make wise decisions about how best to do it. Primary disadvantages of centralized organizational structure include it (1) lengthens the response times by those closest to the market conditions because they must seek approval for their actions; (2) does not encourage responsibility among lower-level managers and rank-and-file employees; and (3) discourages lower-level managers and rank-and-file employees from exercising any initiative.
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