The management of business operations is an essential element for the effective operation of a business. One of the key issues that arise in the process of decision-making is the choice between centralised and decentralised management of corporate functions. Each approach has its own advantages and analyzing the advantages and disadvantages of each approach, can be made an informed decision that meets the needs of the business.

The central management of corporate functions referred to in μονοκεντρικό model where decisions are taken at a central point, usually from the head management of the company. This approach provides a homogeneous and uniform management in all units and areas of the company. The central decisions are taken based on the catholic perspective and strategy of the company, strengthening coordination and coherence of operational activities.

On the other hand, the decentralized management of corporate functions implies the delegation of responsibilities and powers in different units or areas of the business. Each unit or sector makes decisions relating to the operational needs and adapt to their environment. This approach promotes local knowledge, flexibility and innovation, as each unit has the opportunity to adapt the activities according to the needs of the market and local factors.

Both approaches have their advantages and are suitable for different types of businesses and situations. The choice between centralised and decentralised management depends on many factors, such as the sector of activity, the geographical regions, the complexity of the business and strategic objectives.

Central administration

The central government represents the core of the operation of a company, having the responsibility for coordinating the implementation of strategic decisions and ensure the effective operation at all levels of the organization. Despite the fact that the central government brings advantages to the company, is not free from challenges that can negatively affect the performance. It is important to consider in more detail the positive and negative aspects of this function

Advantages:

Coordination and Integration: The central government acts as a coordination centre, by integrating the activities and initiatives of all the sections and sub-units of the company. This ensures that the actions of the company are in line with the strategic objectives and vision.

Strategic Guidance: The central administration is responsible for the development and implementation of the strategy of the company. This includes the analysis of the market, the determination of objectives and the formulation of relevant strategies programs.

Performance Improvement: Through the development of effective procedures and surveillance of the performance, the central government contributes to improving the efficiency and effectiveness of the company.

Video conference in a meeting of a company
Εργγαζόμενοι in a meeting with a senior member of the company

Cons:

Contact with sales departments: In central administration, the marketing department does not have the possibility of the relationship with the sales department of each company to have the desired immediacy, so that the conclusions obtained from the interaction with customers to benefit directly.

Loss of Contact with the Base: The distance between the central administration and of the individual departments or employees may result in loss of contact and understanding of local needs and challenges.

Ολιγορίες in the Reaction: The central government may be facing difficulties to respond directly to changes in the environment or in the markets due to bureaucratic procedures.

Decentralised Management Company

The decentralized administration represents a model for the organization where power and decision-making are distributed at various levels of the company, instead of being concentrated in a central spot, method, which has both positive and negative effects on the functioning of the company.

Advantages:

Local Adaptation: The decentralized administration allows local groups and sections to make decisions that are more compatible with the specific needs and circumstances.

Empathy with the Base: The local teams have a better understanding of local needs and challenges, providing more empathy and customized support.

Creation Of Territories Of Experience: With the decentralised administration, the professionals at various levels have the opportunity to develop expertise and experience in their field.

Improve communication: The decentralized administration increases the speed of communication between the departments and the administration of the department, which contribute to a more direct decision-making.

De-escalation of the administration:Fragmentation of responsibility for decision-making to the managers of each branch, with the result that the management of the company to focus on central decisions, without being distracted with matters of everyday life.

Cons:

Lack Of An Integrated Perspective: The decentralized administration can lead to a lack of overall visibility and strategic guidance, as well as local groups often focus on specific needs.

Diffusion of Power: The decentralized administration can lead to a diffusion of power and responsibility, with the result that makes it difficult for the decision-making and the implementation of certain policies.

Risk Of Lack Of Cohesion: The lack of unity and cohesion in the decisions and actions can lead to contradictions and divisions within the company

Increased cost: H decentralized administration has inevitably increased costs given the necessity for a greater number of staff and consequently the need for larger office facilities and production.

Meeting engineers with engineering drawings

And the central and the decentralized administration have each own advantages and it is assumed that the decision on the implementation of one of the two forms of administration depends on factors, such as the number of workers, company size,geographic location of the headquarters and of the annex and the type of activity of the enterprise.

In each case, however, the central administration of a company gives you the ability through the centralized management of the majority of issues, the preservation of a common policy, without failures and deviations from the central directive. For example, the human resources department, headquarters can choose staff with a much greater success rate, given that he is aware of all the options that have preceded it. This achieves remarkable homogeneity, which strengthens the identity of the company. The same is true for the marketing department, as well as for the customer service department.Of course, this does not mean that the decentralized administration may not yield significant benefits associated with the profitability of the company, if exploited hybrid with central.

More specifically, each company could classify the issues that arise on a daily basis on issues that require resolution headquarters and issues that can be resolved by the staff of the annex. For example, the it department of the central office of a company could be implemented daily tasks related to sharing and common use among the branches or issues related to the server, while in local climates the current IT issues relating to the place of work of each employee of the branch, such as, for example, the installation or upgrade of a software in a H/Y.

Αξιοποιώντας τα πλεονεκτήματα κάθε μορφής διοίκησης είναι πραγματικά εφικτό να επιτευχθεί αυξημένη παραγωγικότητα, λιγότερες καθυστερήσεις και αστοχίες και τελικά μεγαλύτερο ποσοστό αποτελεσματικότητας σε σχέση με μία αμιγώς κεντρική ή αποκεντρωμένη μορφή διαχείρισης μιας εταιρείας.

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