Decentralised management structure refers to all decisions are made through the organisation instead of they are being made at the centre eg head office of an organisation. In the modern competitive business world bing companies have to accept the paradox that to stay big they have to act small.
Advantages of decentralised management structure are it should provide a better match of expenditure against local priorities and preferences. The workers have local knowledge especially when selling in overseas market. There should be a clear links in terms of the benefits to the local area in utilising their resources in a more efficient manner. It will be more motivating and build more trust. If managers are more in control of their destiny then this should show the manager their worth to the organisation, increasing empowerment and innovative, It also able to be more flexible as decisions can be made quickly according to changing local needs.
On the other hand, there are also disadvantages to decentralisation. It needs extensive staff training. If there are better training and training facilities they will be able to work more efficiently but it will add to cost . Risk of less control and less consistency could be take. Imagine if a customer bought two different electrical goods. He will expect them to be exactly the same. If one factory change the input, would this unsettle his future decision to purchase?
It is unlikely there will be ever be complete centralisation or decentralisation as the advantages will often be counter balanced by the disadvantages. Certain functions within a business will always be centralised because of their importance eg decisions about budget allocation are likely to be centralised. Some delegation is necessary in all firms because ...