Question

Which of the following differentiates a centralized organization from a decentralized organization?

A.In a centralized organization, the advertising manager is responsible for all promotions activities including sales, whereas in a decentralized organization, the advertising manager is responsible for all promotions activities except sales.
B.A centralized organizational structure is used in large companies with more than 1000 employees, whereas a decentralized organization system is used only in smaller companies which have not more than 500 employees.
C.In a centralized organization, an advertising manager controls the entire promotions operation for all the products of a company, whereas in a decentralized organization, each product is assigned to a different brand manager.
D.A centralized organizational structure includes a category management system, whereas a decentralized organizational structure does not include one.
E.In a centralized organization, the efforts of all the brand managers are coordinated by the category managers, whereas in a decentralized organization, the efforts of all the brand managers are coordinated by the advertising managers.

Answer 1

A centralized organization refers to a structure where decision-making is concentrated at the top, whereas a decentralized organization spreads decision-making across various levels, allowing for more autonomous control, particularly at lower levels or by different brand managers for different products.

Step-by-step explanation:

The distinction between centralized and decentralized organizations lies primarily in decision-making processes and management structure. In a centralized organization, decisions are typically made at the top level, and lower levels are expected to follow those directives. A centralized advertising manager, for instance, would control the promotions operations for all products of a company. Conversely, a decentralized organization allows for decision-making at lower levels and fosters autonomy. Therefore, within a decentralized structure, each product might be assigned to a different brand manager who has the agency to tailor promotions more specifically to their product.

In business environments, decentralization is often exemplified by a market economy where private enterprises make autonomous economic decisions based on market demand. By contrast, command economies exhibit highly centralized control over economic decisions, similar to bureaucratic structures found within certain organizations. However, it's important to note that organizational size is not a determinant of whether a structure is centralized or decentralized. Likewise, the existence of category managers does not define organizational centralization.