Centralisation v decentralisation

In this lesson

1. 0:00 Centralisation and decentralisation explained
2. 1:21 Advantages of centralised structures
3. 2:47 Disadvantages of centralised structures
4. 4:20 Advantages of decentralised structures
5. 5:26 Disadvantages of decentralised structures
6. 6:24 ABC Enterprises case study analysis
7. 8:30 Guild and Campbell's three strategic approaches
8. 10:42 Centralisation in conglomerates and strategic business units

About this lesson

You'll explore the advantages and disadvantages of each approach, understand when to recommend one over the other, and discover how parent companies manage subsidiary structures through different strategic controls. Centralisation concentrates decision-making authority at the top of the organisation, creating consistent policies, clear control, and potential cost savings through pooled resources. However, it can slow responses to market changes, demotivate employees, create bottlenecks in leadership, and stifle innovation. Decentralisation disperses decision-making across the organisation, enabling faster local responses, greater employee empowerment, and more innovation. The trade-off is potential inconsistency, coordination challenges, and reduced central control. The video walks you through a practical scenario involving a technology firm deciding between structures, showing how to evaluate organisational context—growth stage, market diversity, and innovation needs—to make a recommendation. You'll also learn Goold and Campbell's three approaches for how parent companies add value to subsidiaries: strategic planning, financial control, and strategic control. Understanding these frameworks helps you balance autonomy with oversight in conglomerate structures.

Duration: 13m