1. What are the advantages and disadvantages of decentralization?

Advantages:

- more authority to lower-level employees

- sense of empowerment
- decisions can be made more quickly
- employees believe that companies provide greater levels of procedural fairness to
employees

Disadvantages:

- employees are more comfortable in an organization where their manager confidently gives
instructions and makes decisions
- issues with coordination
- managers may have different agenda, this may create a schism between the goals

2. All else being equal, would you prefer to work in a tall or flat organization? Why?

If we were to choose, we would prefer working in a flat organization. In comparison to a tall

organizational structure, a flat organization structure has fewer levels of management and therefore
a short chain of command. Flat structures tend to empower the employees more and allow them a
greater sense of responsibility and autonomy. Employees in a flat structure are encouraged to work
together to solve company issues. That is why many tech companies and other newer businesses
hoping to encourage innovation often prefer flat organization structures. We like that in a flat
organization, anyone can and should email/talk to anyone else according to what they think is the
fastest way to solve a problem for the benefit of the whole company. Anyone can make a change for
the better.

3. What are the advantages and disadvantages of departmentalization by product?

Advantages:

- The product departmentalization method is suitable for multiproduct complex organizations.

- It brings specialization in a product or service which makes optimum utilization of human resources.

- Each product can be focused on its productivity and profitability.

- All activities associated with each product can easily be integrated and coordinated.

- The speed and effectiveness of decision making can be enhanced.

- Monitoring and evaluation become easy and effective.

- The product/service manager can be held accountable for the profitability of each service/product.

- It permits maximum utilization of specialized product/service facilities.

Disadvantages:

- Departmental managers focus on their own product line rather than the organizational overall
activities. Thus, coordination becomes less effective.
- Conflict may arise between product/service and other departments as the responsibilities are
interdependent.

- There may be an underutilization of plant capacity if the demand for the product/service is not
sufficient.

- It creates the problem of effective control over production divisions by the top management.

- The administrative cost rises up due to the provision of functional specialists in each product
department. This reduces the profitability of the organization.

- The service/product manager may ignore the overall objective of the organization.

Kalina Raus
Nicola Włodarczyk