In Chapter 11 you read about centralized and decentralized d

In Chapter 11 you read about centralized and decentralized decision making. Between the two philosophies which do you feel works better and why? Feel free to include any experiences you have had under each atmosphere.

Solution

Centralization of authority means the power of planning and decision making are exclusively in the hands of top management while in case of Decentralization, the powers for the same has been disseminated by the top management to middle or low level management. The decision making process and value systems influence the overall approach of decision makers from various cultures. A country’s orientation whether it is individualistic or collectivist influences the level at which decisions are made. The American decision style reflects a comparatively higher need for achievement, tend to make decisions that either respond to challenges or create opportunities for their efforts to be recognized and praised by others. Chinese decision styles reflect comparatively high needs for affiliation and personal power. American managers will likely try to change the organizational power structure in order to improve business performance, whereas Chinese business leaders desire to maintain a high degree of control.

As of today, China has overtaken the US by at least one measure of total economic strength, which is GDP based on purchasing power parity. China’s is totally a controlled economy but still they have managed to grow to the top. But, the United States is a sophisticated and highly diversified economy where in most sectors decentralized structure prevails. Generally, utilitarianism strongly guides the Western world, and in fact research has shown that US executives are more influenced by a short-term, cost-benefit approach to decision-making than counterparts.

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