Skip to content

ACCA Strategic Professional · Strategic Business Leader · Enabling success: organising

Kessler Group, a conglomerate, gives each divisional head full authority over pricing, hiring and investment up to a high limit. Divisions have recently pursued conflicting strategies, one division has damaged the group brand, and the board has little timely information. The board wishes to keep divisional motivation but regain strategic coherence. Which response is most appropriate?

The board should keep decentralisation but add central policies on brand and strategy plus reporting and performance controls. This restores coherence and information flow while preserving divisional motivation. Full centralisation would sacrifice the benefits it wants to keep, and the other options are impractical or disproportionate.

  1. ARevert to full centralisation of all decisions at head office
  2. BRetain decentralisation but add clear central policies on brand and strategy, with reporting and performance controlsCorrect
  3. CReduce the span of control of every divisional head to one
  4. DAbolish divisions and use a single functional structure

Explanation

The problems (inconsistency, brand risk, poor information) are classic costs of decentralisation and call for stronger central frameworks and monitoring, not abandonment of delegation. Full centralisation would lose the motivation the board wants to keep. A span of one is meaningless, and abolishing divisions is disproportionate.

Did you get it right without looking?

One question tells you little. A timed set on Enabling success: organising shows your real accuracy, how long you take and where you lose marks.

Practise Enabling success: organisingFree diagnostic mock

More Enabling success: organising questions