Skip to content

ACCA Applied Knowledge · Business and Technology · Business organisational structure

Zeta Retail operates 40 stores. Head office sets all prices, selects all products and approves any spending above $200. Store managers complain that they cannot react to local competitors. Which change would represent decentralisation of decision-making?

Allowing store managers to set prices on selected products within an agreed range is decentralisation, because it passes decision-making authority from head office to local managers. Daily reporting and a common IT system strengthen central control, while merging regions does not itself delegate any decisions.

  1. ARequiring store managers to submit daily sales reports to head office
  2. BAllowing store managers to set prices on selected products within a range agreed with head officeCorrect
  3. CReducing the number of stores and merging regions
  4. DIntroducing a single IT system for all stores

Explanation

Decentralisation means delegating decision-making authority to lower levels. Letting store managers set prices within limits transfers authority to them. Daily reporting and a single IT system increase central visibility or control, and merging regions is a structural change that does not delegate decisions.

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