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ACCA Applied Knowledge · Business and Technology · Business organisational structure

Which of the following is the most likely benefit of a highly centralised organisational structure?

Greater consistency of decisions and policies is the main benefit of centralisation, because authority sits with senior management who apply the same standards everywhere. Faster local response, local manager motivation and management development are advantages normally associated with decentralisation rather than centralisation.

  1. AFaster local responses to customer needs
  2. BGreater consistency of decisions and policies across the organisationCorrect
  3. CIncreased motivation of local managers through greater autonomy
  4. DBetter training of junior managers for senior roles

Explanation

In a centralised structure, decision-making authority is held at the top, so policies and decisions are applied consistently. The other options are typical benefits of decentralisation, where local managers have autonomy and respond more quickly to local conditions.

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