International Case - Restructuring at Korea's Daewoo
INTERNATIONAL CASE – RESTRUCTURING AT
KOREA’S DAEWOO
Question – 1. What are the advantages and disadvantages of a hands-off, decentralized management approach ?
Answer – 1
1. Decentralization. It is the “tendency to disperse decision making authority in an organized structure”.
2. Decentralized Organization. A decentralized organization is one in which decision making is not confined to a few top executives rather is throughout the organization, with managers at various levels making key operating decisions relating to their sphere of responsibility. Decentralization is a matter of degree, since all organizations are decentralized to some extent out of necessity. At one extreme, a strongly decentralized organization is one in which even the lowest-level managers and employees are empowered to make decisions. At the other extreme, in a strongly decentralized organization, lower-level managers have little freedom to make decisions. Although most organizations fall somewhere between these two extremes, there is a pronounced trend toward more and more decentralization.
3. Advantages & Disadvantages of Decentralization. Advantages of decentralization include faster, more responsive decisions, greater flexibility, more initiative at lower levels, reduced coordination efforts, reduced administration, and redundant capabilities. By moving decision making down the structure, response time is cut as the person making the decision is closer to the situation. The organization can react more quickly in this arrangement than if it had to route all decisions through a central location. In addition to more rapid decisions, decentralization can lead to greater flexibility in dealing with problems. A small unit is able to adapt to unexpected circumstances with more ease than a large, cumbersome organization.
4. Flexibility is often the by-product of innovation. As responsibility and functions are dispersed throughout the agency, individuals can express an amount of initiative
KOREA’S DAEWOO
Question – 1. What are the advantages and disadvantages of a hands-off, decentralized management approach ?
Answer – 1
1. Decentralization. It is the “tendency to disperse decision making authority in an organized structure”.
2. Decentralized Organization. A decentralized organization is one in which decision making is not confined to a few top executives rather is throughout the organization, with managers at various levels making key operating decisions relating to their sphere of responsibility. Decentralization is a matter of degree, since all organizations are decentralized to some extent out of necessity. At one extreme, a strongly decentralized organization is one in which even the lowest-level managers and employees are empowered to make decisions. At the other extreme, in a strongly decentralized organization, lower-level managers have little freedom to make decisions. Although most organizations fall somewhere between these two extremes, there is a pronounced trend toward more and more decentralization.
3. Advantages & Disadvantages of Decentralization. Advantages of decentralization include faster, more responsive decisions, greater flexibility, more initiative at lower levels, reduced coordination efforts, reduced administration, and redundant capabilities. By moving decision making down the structure, response time is cut as the person making the decision is closer to the situation. The organization can react more quickly in this arrangement than if it had to route all decisions through a central location. In addition to more rapid decisions, decentralization can lead to greater flexibility in dealing with problems. A small unit is able to adapt to unexpected circumstances with more ease than a large, cumbersome organization.
4. Flexibility is often the by-product of innovation. As responsibility and functions are dispersed throughout the agency, individuals can express an amount of initiative