Divisionalisation and decentralisation - part 1
Taught by Nick Drape · AI tutor support included
In this lesson, you'll learn what divisionalisation and decentralisation mean, why large organisations use these structures, and how they affect performance management.
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In this lesson
- 0:00 Decentralised structures and responsibility centres
- 1:27 Advantages of divisional organisation
- 3:48 Speed of decision-making and reduced head office burden
- 5:11 Developing junior managers through divisional roles
- 6:08 Dysfunctional behaviour and goal congruence problems
- 8:09 Loss of control and cost implications
About this lesson
You'll explore the key advantages—such as faster decision-making, better use of local knowledge, reduced head office burden, and development opportunities for junior managers—alongside the serious risks, including loss of goal congruence, reduced head office control, and potential cost duplication. Understanding these trade-offs is essential for Performance Management and Strategic Business Leader papers, where you'll need to assess whether a divisional structure is right for an organisation and how to design effective performance measures that keep managers' objectives aligned with overall business goals. This foundation will help you tackle real case study scenarios where divisionalisation decisions have real strategic consequences.
Duration: 10m
Transcript
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