A Centralized Organization In A High Growth Rate Company Can Be A Hindrance To Success! But, A Decentralized Organization Structure Can Breed Redundancy In Many Functions!! — Law #84
Organizations are born to be changed and should be continually reviewed to optimize cost and effectiveness.
Most companies obtain growth by expanding the breadth and diversity of products and markets.
Optimizing the organization to best serve the customer must be explored.
A decentralized organization can generally serve the customer better. A centralized organization can have too many layers between the top manager and the customer. A decentralized organization gives more chances to develop managers.
Ultimately, as a company grows “champions” are needed to add new products, new market segments or new processes to make it happen…but, often it is difficult to get the talent needed in a decentralized organization. Needed controls can be lost.