The structure of organizations is an important factor in whether they can respond appropriately to challenges that arise. The traditional, centralized organization has long been favored as offering standardization and efficiency, while the newer decentralized organization is being touted as more flexible and effective. This paper examines the advantages of each and asserts that the decentralized organization is more advantageous for organizations in the new globalized marketplace, supporting this assertion with references to the literature. Concepts related to decentralized organizations, such as boundaryless organizations, the management of uncertainty, and self-managed teams are also discussed as central to the success of the new decentralized organization.
TodayÆs organizations are more decentralizedùhaving multiple small, autonomous groups instead of one large group with a central locus of controlùthan organizations of the past, and this has raised a controversy between those who believe that organizations should be centralized and those who believe they should be decentralized. On the centralization side, proponents point to the benefits of standardization and efficiency, while on the decentralization side, proponents tout flexibility and effectiveness. Every organization values all four of those benefits, so the argument over which type of organization is best continues. By analyzing the changes in todayÆs global marketplace along with the new types of leadership and organizations in use today, it is possible to make an informed decision about which type of organization is best. Given todayÆs environment, the most effective organization is a decentralized one. This paper will undertake a systematic review of the global marketplace and the differences between these two types of organization and explain why decentralization offers more benefits.
Any organization that intends to survive in todayÆs global marketp...