Establishing the Decision-Making Hierarchy

  1. Objective 6-3 Describe centralization and decentralization, delegation, and authority as the key ingredients in establishing the decision-making hierarchy.

The third major building block of organizational structure is the establishment of a decision-making hierarchy. This is usually done by formalizing reporting relationships. When the focus is on the reporting relationships among individual managers and the people who report to them, it is most commonly referred to as delegation. However, when the focus is on the overall organization, it becomes a question of decentralization versus centralization.

Distributing Authority: Centralization and Decentralization

Some managers make the conscious decision ...

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