Skip to content

ACCA Applied Knowledge · Business and Technology · Business organisational structure

Zeta Retail has 40 stores. Head office currently approves all supplier contracts, store staffing levels and local promotions. Store managers complain of slow responses to local competitors. Which change would be an example of decentralisation that addresses this problem?

Allowing store managers to set local promotions within an agreed budget is decentralisation, because decision authority moves from head office to the stores. This addresses slow responses to local competition. Weekly reporting, a single IT system and standard layouts do not delegate decision-making and may increase central control.

  1. ARequiring stores to submit weekly sales reports to head office
  2. BAllowing store managers to set local promotions within an agreed budgetCorrect
  3. CIntroducing a single IT system for all stores' inventory records
  4. DStandardising store layouts across all 40 locations

Explanation

Decentralisation means delegating decision-making authority downwards. Letting store managers decide local promotions within a budget does this and speeds up response to local competitors. Reporting, a common IT system and standard layouts do not transfer authority and may even reinforce central control.

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.

Practise Business organisational structureFree diagnostic mock

More Business organisational structure questions