The traditional way for company to go international is to have centralized headq
ID: 390548 • Letter: T
Question
The traditional way for company to go international is to have centralized headquarters in the home country with hierarchical and often bureaucratic decision making processes. As businesses face greater degrees of globalization, for many companies this structure has proven to be less effective than decentralized organizational structures. Before starting this assignment, review the readings and resources provided in our online lecture, book, Kean library and reputable sources found on the Internet.
When ready, fully answer the following questions.
Identify and explain three benefits of decentralized decision making. Discuss how these benefits might create strategic and/or operational difficulties.
Identify an organization that is striving to achieve the ideal of “boundarylessness.” Explain what “boundaryless” means then describe some tools and techniques used to help aid this type of working environment?
Would you prefer to work in a centralized or decentralized company? What outlooks and competencies would make you a high-performing executive in your preferred choice?
Explanation / Answer
what was historically distinct and separate markets are now shifting to towards a more integrated and interdependent economy. With more and more companies trying to become global, the world has become one flat global market. The traditional method way of a company becoming global was with the roots in the domestic market where the power is centralized and expanding to other international markets. With the global markets becoming more lucrative companies enter untapped markets with competitive advantages. For ages, organizations have depended upon the centralized method of decision making while becoming global. Even though this method has proven to be successful because it offers standardisation of work, flexibility, better control, no duplication of work, fast and rigid decision making the power/ authority rests in the hands of a few.
The decentralized method of decision making has its own advantages and some of them are:
1.Effective control and Supervision: Managers and supervisors have more powers vested in them to take effective measures to control and supervise the employees. This allows the manager to change the objectives, to take the necessary disciplinary actions and to motivate, control and to supervise the activities of the subordinates.
2.Diversification of Activities: Decentralization leads to the division of power to the different levels of the organization. With this decentralization, it is possible to allocate tasks and responsibilities equally among subordinates. This leads to the subordinates taking up responsibilities and being liable for their own actions and failures. Decentralization helps in the higher level managers concentrating upon objectives focused on the ultimate goal of the organization the lower level managers can focus on achieving the goals of the department.
3.Better utilization Management: this approach helps in the better utilization of lower and middle management, more and improved training, achievement of individual goals, leading to achievement of department goals which fosters the growth for the organization.
Boundaryless organization
An organization which is trying to be boundaryless is Samsung which tries to empower the employees by removing all physical and hierarchical structure and to create a virtual workspace which connects all of the organization.
Traditional organizations have had a defined structure and vertical and horizontal borders and structures, whereas boundaryless organizations do not have any structures or boundaries and allow the free flow of information, ideas, culture, processes which result in efficiency, innovation and growth. The concept of boundarylessness was pioneered by Jack Welch, chairman of GE, a well-known management thinker who wanted to remove all barriers that existed in an organization. According to him flexibility and adaptability are the most important factors of boundaryless organizations.
Boundaryless organizations achieve this feat of no barriers with the use of advanced technology and tools such as virtual collaboration and flexible working. The digitization of the office space and aid of internet along with tools like emails, video conferencing, cloud storage, virtual meetings allows to remove all hierarchical and structural barriers and helps employees to connect with each other beyond time zones, countries, cultures. In a boundaryless organization, the staff have more responsibility for their own projects and goals and they should be more capable of achieving these goals with respect to the ultimate goal. Hence boundaryless organizations should have a strong vision and core values.
I would prefer to work in a decentralized organization as it provides me more power to take decisions which are rational and to take the best possible method to achieve this task. As more power is vested in me I will be more liable for my actions and my actions and decisions are taken into consideration for the growth of the company. Decentralization helps in performing as a team and possibly getting the best solution to a problem. Some of the competencies required would be confidence, strong will, the strength to take up new responsibilities, to adapt to extreme situations, to be a team player, effective communication and management skills.
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