Centralised Structures

• Centralized structures

  Control and decision-making is managed by the highest layers of management such as the CEO, board of directors, or senior management
• Advantages of centralized structures

  • Quicker decision-making due to top layer of management having few staff to discuss decisions with
  • Consistency in decision-making leading to consistency in aims, vision, and culture of the business
  • Motivation of staff due to clear roles and job tasks
• Authoritarian management style may suit a centralized structure

  Applicable if the business is in a crisis
• Centralized structures may lead to purchasing economies of scale


  Lowering average cost per unit
• Centralized structures may lead to consistent service in branches


  Customers experience the same service across all branches
• Disadvantages of centralized structures
• Rigidity in decision-making in centralized structures

  Less flexibility as decisions always need approval from top management, leading to missed opportunities
• Junior managers lack authority in centralized structures


  May lead to less motivation, productivity, and innovation
• Top layer of management in centralized structures may prefer compliance and obedience

  Leading to the maintenance of the status quo