View attached explanation and answer. Let me know if you have any questions.1Decentralizing The Company’s Decision-Making ActivitiesNameInstitutionCourseProfessorDate2Decentralizing The Company’s Decision-Making ActivitiesTiller Components is headed by Sherry Smith, who also serves as president and chiefexecutive officer. She started the company, and now it’s a major supplier of parts and accessoriesfor vehicle manufacturers. Over 35 states are represented by the firm’s manufacturing facilities.Smith is discovering that she is no longer able to control her life and maintain her usual routine.As such, the management may need to decentralizing the company’s decision-making activities.This decentralization has both benefits and limitations. On one hand, to start, it improves thequality and timeliness of the judgments that managers may make (Bertacchini, Dalle Nogare &Scuderi, 2018). Supervisors at lower levels are better in tune with the everyday issues facingtheir departments because of their direct involvement in them. As a result, they are moreequipped to adapt to local conditions than their more senior rivals. Management at lower levelshave a closer working relationship with both staff and customers, putting them in a primeposition to resolve difficulties quickly and efficiently thanks to a lack of bureaucratic red tape.Second, it reduces stress for upper-level administration. The decentralization of acompany relieves the upper leadership of the responsibility of managing the day-to-dayactivities. They are released from the burden of day-to-day issue solving, or “managementfirefighting.” This allows upper-level management to concentrate on strategic tasks such as longterm planning, engaging with key customers and suppliers, assessing investment opportunities,determining appropriate levels of finance (Bertacchini, Dalle Nogare & Scuderi, 2018). Finally,it encourages and enables middle and lower-level management. Delegating decision-making tomiddle management increases their sense of agency and drives them to work harder toward thecompany’s objectives. As a corollary, decentralization and local control ultimately foster tighter,more connected subunits. By having a voice in the decisions that affect their workgroups,3workers’ morale is boosted. On the other hand, when authority is decentralized, managers incharge of different departments are under more pressure than ever to maximize profits. Thismight cause tensions to rise between different departments. The leaders of each departmentmight be tempted to further their own interests at the expense of those of their colleagues.Management and governance issues may also develop from the existence of such “minicompanies” or “small empires” inside a larger organization. Secondly, work is repeated byseveral employees when power is decentralized. Each department needs its own team of expertsin areas like procurement, HR, and marketing if it is to function effectively as a standaloneentity. Each department must thus maintain a large and expensive specialized workforce. It is notalways easy to find qualified people to head up the many subsets of a company. Individuals maymake different choices when they are given the leeway to do what they want. As a businessexpands, it’s not uncommon for top-down directives to lose their impact. Decentralization alsonecessitates training programs, which may be costly and time-consuming.During decentralization, there are various functions which should remain central for thecompany. Any activity that has a high frequency of occurrence or is performed continuously bythe organization might be considered a “function” of the organization and therefore be centralize.Typical business operations include information technology, research and development. Therehas been a recent trend toward “nontraditional” organizational structures as a means throughwhich companies may provide their workers with more independence (Foss, Lyngsie & Zahra,2015). Not only does this provide workers greater leeway in determining how and when they gettheir work done, but it also helps them better understand the influence they have on theorganization as a whole. There is no benefit to decentralization if it is not directed towardsomething specific. Failed efforts at decentralization are often the result of poor lines of4communication between upper and lower management, as well as a lack of defined roles andresponsibilities for staff members.If Sherry Smith…
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