University of Central Florida (UCF) MAN3025 Management of Organizations Exam 4 Practice

A decentralized structure allows for greater decision-making authority at different levels of the organization, which can empower employees and enhance engagement. However, one common drawback is poor coordination in decision making. This occurs because with multiple individuals or teams making decisions independently, there can be a lack of consistency and coherence in how those decisions align with the overall objectives of the organization.

Each department or unit may pursue its own interests, potentially leading to conflicting decisions, duplicated efforts, or gaps in communication between units. This fragmentation can hinder the organization’s ability to function as a cohesive whole, complicating strategic initiatives that require coordinated action across various parts of the business. Thus, while decentralization can foster agility and responsiveness, it may also introduce challenges related to unified direction and collaborative execution.