ACCA Applied Knowledge · Business and Technology · Business organisational structure
A retailer wants to respond quickly to local customer needs by giving regional units decisions over pricing and stock, while head office sets only overall strategy. Which approach does this reflect?
This reflects decentralisation of authority. Regional units take decisions on pricing and stock, while head office keeps only overall strategy, which allows faster local responsiveness. Centralisation would retain those decisions at head office, and formalisation concerns rules rather than authority location.
- ADecentralisation of authorityCorrect
- BCentralisation of authority
- CIncreased formalisation of rules
Explanation
Passing decision-making to regional units is decentralisation, which speeds local responsiveness. Centralisation keeps decisions at head office, and formalisation concerns rules and procedures rather than where authority sits.
Did you get it right without looking?
One question tells you little. A timed set on Business organisational structure shows your real accuracy, how long you take and where you lose marks.
More Business organisational structure questions
- A software company has no permanent departments. Small teams of specialists form around each client project, with each team disbanding when …
- Zeta Co is organised so that staff report both to a functional head, such as the finance director, and to a project manager for the product …
- Zenith Foods sells in Europe, Asia and South America. Each region has its own manager who is responsible for all marketing, sales and distri…
- Which of the following is an advantage of a clear scalar chain in an organisation?
- Kobe Ltd decentralises authority to its divisions, but each divisional manager pursues goals that maximise divisional profit even where this…
- A small start-up is run by its founder, who makes nearly all decisions and coordinates work by personal direct supervision. Which of Mintzbe…