ExpertEasy2 marksMultiple Choice
Syllabus B: Organisational structure, culture, governance and sustainabilitySyllabus BDecentralisationOrganizational Structure
ACCA · Question 10 · Syllabus B: Organisational structure, culture, governance and sustainability
Section A
GlobalMart, a multinational retail franchise, allows its regional store managers to independently select 40% of their inventory based on local cultural preferences, set their own local marketing budgets, and hire staff without head office approval. Which organizational concept does this scenario best illustrate?
Section A
GlobalMart, a multinational retail franchise, allows its regional store managers to independently select 40% of their inventory based on local cultural preferences, set their own local marketing budgets, and hire staff without head office approval. Which organizational concept does this scenario best illustrate?
Answer options:
A.
Centralisation
B.
Decentralisation
C.
Span of control
D.
Scalar chain
How to approach this question
Note that lower-level managers (regional store managers) have the authority to make significant business decisions (inventory, budget, hiring). This is the definition of decentralisation.
Full Answer
B.Decentralisation✓ Correct
Decentralisation occurs when decision-making authority is distributed downwards through the organizational hierarchy. By allowing local managers to make inventory, marketing, and hiring decisions, GlobalMart is operating a highly decentralised structure.
Common mistakes
Confusing decentralisation with span of control. While flat structures (wide span) often correlate with decentralisation, the specific act of delegating decision power is decentralisation.
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