In order to continue enjoying our site, we ask that you confirm your identity as a human. Thank you very much for your cooperation.
The year was 2004. The United States Army entered a complicated combat. The combat was very different from any other. They were facing the terror organization Al Qaeda. What was different in this case? Why did the US Army find it so challenging to wage a war against ill-equipped and seemingly backward organization? Read this article to find out more about organizational structure. A comparison of centralized vs decentralized organization shows us that which type of structure is better in specific situations.
Centralized and Decentralized Organizational Structure
An organized set of individuals, teams and business units constitutes a firm. These entities come together in providing products and services for the customers. A firm’s activities create product and services for the customers. Moreover, these activities require some management of roles and responsibilities. An ‘organizational structure’ is like a diagram that shows how these activities are orchestrated.
A centralized organization is one where there is top down approach. The higher-ranking managers have higher control over the lower ones. The ideation, strategy and execution trickles down this hierarchy. This structure is similar to how the armies have been traditionally organized.
On the other hand, decentralization is achieved when the decision-making authority is distributed to lower ranking managers. This gives them more autonomy to take decisions. Although, it helps in agility and increases innovation, there are some drawbacks as well. Decentralized organizations may increase the redundancy. There may also be miscommunication, conflicting objectives and inefficiencies.
Chart for Centralized vs Decentralized Organization
The above diagram shows the central organizational chart. The chart compares it to the decentralized organization. As you can see, the centralized organization has a central command of authority. On the other hand, the decentralized organization has a distributed command of authority.
Advantages of Centralized Organization
The Disadvantages of a Centralized Organizational Structure
Advantages of Decentralized Organization
The Disadvantages of a Decentralized Organizational Structure
The disadvantages of a centralized organizational structure include the following:
US Army vs Al Qaeda – a golden lesson in organizational design
The Al Qaeda was structured as a formidable force. Firstly, the organization was designed like a network of small teams. These teams defied the traditional army structure and hierarchy. This allowed them independence and spontaneity. As a whole, they were unpredictable bunch of guerrilla warriors. Extremely difficult for the allied forces to understand and fight. This type of organization is essentially a decentralized structure. It provides higher agility and ability to adapt better to the changes. It is relatively new way of looking at centralized vs decentralized organization.
Finally, the United States Army, adapted themselves into a new structure. They developed a hybrid approach. The book ‘Team of Teams’ talks about the history of this war and how this structure helped America register a victory against the formidable force. A team of teams is an organizational structure where organization works as a network of smaller, independent teams. They are connected with each other but function independently. This offers the middle ground between the centralization vs decentralized organization.
The Benefits of Team of Teams Structure