Explain the benefits and disadvantages of a decentralized organization. case Wat

Question

Explain the benefits and disadvantages of a decentralized organization.

case

Watlow Electric Manufacturing Company designs and manufactures industrial heaters, temperature sensors, controllers, and supporting software as well as assemblies – all of the components of a thermal system (Watlow, n.d.). Since 1922, the company has grown in product capability, market experience and global reach (Watlow, n.d.).  The company holds more than 450 patents and employs 2,000 employees working in nine (9) manufacturing facilities and three (3) technology centers in the United States, Mexico, Europe, and Asia (Watlow, n.d.). Watlow also has sales offices in 16 countries around the world. The company continues to grow, while the commitment remains the same – to provide its customers with superior products and services for their individual needs (Watlow, n.d.).

Except in very small organizations, top managers must delegate some decisions. In a decentralized organization, decision-making authority is spread throughout the organization rather than being confined to a few top executives. As noted above, out of necessity all large organizations are decentralized to some extent. Organizations do differ, however, in the extent to which they are decentralized. In strongly centralized organizations, decision-making authority is reluctantly delegated to lower-level managers who have little freedom to make decisions. In strongly decentralized organizations, even the lowest-level managers are empowered to make as many decisions as possible. Most organizations fall somewhere between these two (2) extremes.

You are Chief Operations Officer (COO) of Watlow Electric Manufacturing Company.  The company currently operates under a decentralized organizational structure; however, recent mishaps have occurred due to a perceived lack of control over manufacturing processes and marketing decisions. In response, the CEO is considering the possibility of changing the organizational structure of the company. 
1 You have been asked to consider the recent issues experienced at the company, determine if they can be reasonably attributed to the current organizational structure, consider alternative structures and their pros and cons.
2..consider any potential ethical implications associated with their stated position.

Explanation / Answer

1.The recent organizational structure is beneficial for the company however what it needs to do is to make sure that all employees and management people are accountable to organizations and their responsibility. Therefore a risk management team and strategy for accountability and responsibility has to be created so as to avoid any such incident in future.

Lack of control over manufacturing processes and marketing decisions had led to the incident therefore more controls needed to be with some senior management with necessary decision making power delegated to low level employees as well.

2.The potential ethical implications associated with the incident are that company can not act negligently and has to make sure that any incident that harms company shall not occur again. The management shall ethically owe up responsibility and come up with strategy.

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