Centralized vs Decentralized | How Strategy influences Org Structure | Centralised vs Decentralised

How can business #strategy impact #organizationalstructure?
Why does #corporate strategy influence my #leadership style?

Any corporate decision or strategy will alter the business structure. Business structure tends to follow the business strategy and as a result, we might encounter rapid changes in the organizational structure. An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities. The organizational structure also determines how information flows between levels within the company. For example, in a centralized structure, decisions flow from the top down, while in a decentralized structure, decision-making power is distributed among various levels of the organization. Successful organizational structures define each employee's job and how it fits within the overall system.

An organizational structure is either centralized or decentralized.
Traditionally, organizations have been structured with #centralized #leadership and a defined chain of command. The military is an organization famous for its highly centralized structure, with a long and specific #hierarchy of superiors and subordinates.
Nowadays, there has been a rise in decentralized organizations, as is the case with many technology #startups. This allows companies to remain fast, #agile, and #adaptable, with almost every employee receiving a high level of personal agency.

#Decentralization is a type of organizational structure in which daily operations and decision-making responsibilities are delegated to several middle and lower-level managers, especially those that are close to the operating divisions and have local know-how. Locally made decisions may be more effective than centralized decisions when it comes to adapting a product to a new market or anticipating market trends or changes in governmental policies.

Learn to identify business #rationalisation actions. #Rationalization implies the reorganization of a company in order to increase its operating efficiency and can be an immediate result of a change in strategy. This sort of reorganization may lead to an expansion or reduction in company size, a change of policy, or an alteration of strategy pertaining to particular products offered. As a result of rationalization, we might encounter #delayering in the organizational structure, removing middle managers while decreasing the #overheads associated with them.

Refresh your memory on this topic - videos:

Chapters:
00:00 - 1:11 Intro - Author's mission
01:12 - 03:02 Why your organizational structure and leadership style can change
03:03 - 05:18 Learning objectives
05:19 - 08:50 What is an organisational structure and why invest in each job description
08:51 - 15:27 Centralized organizational structure explained (pros and cons)
15:28 - 21:27 Decentralised organisational structure explained (pros and cons)
21:28 - 25:29 Business Rationalization explained
25:30 - 26:13 Advice: Avoid redundancy during a recession - increase your chances of keeping your job!
26:14 - 26:35 Conclusions