9609 · 7.1.5
Centralisation and decentralisation flashcards
Revision flashcards for Cambridge 9609 Centralisation and decentralisation (syllabus 7.1.5). Flip, recall, then mark a real past-paper question.
Card
Centralisation?
Decision-making concentrated at senior/HQ level.
Card
Decentralisation?
Authority delegated to sub-units or regional managers.
Card
Central benefits?
Consistency, bulk buying, unified brand, easier control.
Card
Decentral benefits?
Local knowledge, speed, manager development, motivation.
Card
When centralise?
Crisis, cost-cutting, strong brand standards, small firm.
Card
When decentralise?
Diverse markets, rapid local competition, large geography.
Card
IT impact?
ERP dashboards let HQ monitor while branches decide (9.3.3).
Card
Link to 6.2?
International strategy often needs decentralised marketing (7.1.1).
Card
Define centralisation in a business context.
An organisational structure where the majority of decision-making authority is concentrated in the hands of a few top-level executives at the head office or centre of the business.
Card
State two benefits of a decentralised structure.
1. Faster decision-making in response to local issues as decisions do not need to be referred to head office. 2. Increased motivation and development for lower and middle managers who are given more responsibility and autonomy.
Card
How can a crisis (e.g., a major product recall) affect the degree of centralisation?
During a crisis, a business is likely to become more centralised. Senior management will need to take direct control to ensure a rapid, consistent, and coordinated response, minimising damage to the business's reputation and finances.
Card
What is meant by a hybrid structure in the context of centralisation?
A structure, often enabled by IT, where strategic direction and control are maintained centrally, but operational decision-making authority is delegated to local or departmental managers. It combines elements of both centralisation and decentralisation.
Card
Why might a business with many branches in different countries choose to decentralise?
To allow local managers to adapt products, marketing, and operations to suit different cultural norms, legal requirements, and competitive landscapes in each country, leading to greater market effectiveness.