Analyse the likely positive and negative impact on DA of having a decentralised organisational structure.

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

1. [3] Knowledge: Definition of decentralised organisational structure; Span of control likely to be wide; Likely to be flatter structures as bureaucracies have been thinned; May help development of junior managers; Managers may take decisions that are not in the best interests of the whole organisation
2. [2] Application: How decentralised organisational structure would help DA respond to local conditions if DA adopts strategy 1 and enters a foreign market; Linking benefits/drawbacks to the four product areas; Delegation and empowerment – production manager has authority to deal with production issues; Linking benefits/drawbacks to negotiating with trade unions at the factory
3. [5] Analysis: Drawbacks of decentralisation: A more centralised structure with a fixed set of rules and procedures in all areas of the firm might lead to rapid decision making being possible as there would be less discussion; Less consistent policies throughout the organisation. This could lead to conflicts and create confusion in the minds of consumers about the DA brand; Senior managers at headquarters will be experienced decision-makers. They might make better decisions regarding DA. Benefits of decentralisation: A more motivated workforce contributing to greater productivity within the firm; Decision making in response to changes in local conditions may be quicker - if DA enters foreign markets this could be significant. For reference to motivation needs to link to impact on firm for reward of analysis