ACCA Applied Knowledge · Business and Technology · The formal and informal business organisation
Which of the following factors would most strongly favour a decentralised structure?
Operating in many countries with different customer tastes and regulations favours decentralisation, because local managers understand local conditions and need authority to respond. A small single site, high-risk activities needing tight control and a lack of skilled local managers favour centralisation.
- AA small organisation operating from a single location
- BA need for strict control over a high-risk activity
- COperations in many countries with differing customer tastes and regulationsCorrect
- DA shortage of skilled managers at lower levels
Explanation
Geographic spread with differing local conditions means local managers need authority to adapt. A small single site, high-risk activities and lack of skilled lower managers all favour centralisation.
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