Decentralization; Rebuilding the Corporation

By Piturro, Marlene C. | Management Review, August 1988 | Go to article overview

Decentralization; Rebuilding the Corporation


Piturro, Marlene C., Management Review


Managers had better assume that the skills, knowledge, and tools they will have to master and apply 15 years hence are going to be different and new.... And only they themselves can take responsibility for the necessary learning and relearning, and for directing themselves. "

-Peter F Drucker

A.M.A. Course Catalog, 1986

It used to be easy to visualize what a company should look like-it should be shaped like a pyramid, with the CEO on top. Power, responsibility, decision-making authority, and money trickled down from the man at the summit, who ran things with a firm hand.

Present that scenario to most modern managers, and they would be horrified. This rapidly disappearing structure is at odds with a pervasive trend toward decentralization-assigning greater responsibility to a company's separate business units. INVOLVEMENT AND INNOVATION

Arlene johnson, vice-president of programs at Catalyst, a New York-based research and advisory organization that helps corporations foster the career and leadership development of women, sees most companies either working toward decentralization or adjusting to the changes wrought by it.

johnson explains: "I see the move toward decentralization as a way for managers to be closer to the action. There is less tolerance for hierarchy, and more power, autonomy, and entrepreneurial spirit further down the line than ever before. Decentralization is appropriate for our times. There's an increasingly competitive climate for business, a need to penetrate global markets, a need for more involvement of employees at all levels, and a desire by people to feel responsible and involved with what they're doing.

"In the upper echelons the opportunities are really exciting. While before each company had only one CEO, in a decentralized company there's a chance for 50 or even more people to be CEOs of their own, smaller businesses. It leads to a lot more innovation."

Johnson emphasizes the importance of separating the concept of decentralization from geography: "It's entirely possible to either have a centralized organization with sites all over the world, or a decentralized organization all in one place. It's a question of reorganizing accountability rather than where you are physically."

She believes a more decentralized organization creates an environment where there's freedom for experimentation and innovation. For example, trying out innovative human resources policies, such as extended parenting leave, part-time work, work at home, and job sharing, will be easier at a company that's made up of many small businesses. "Trying something on a small scale is relatively risk-free for a big company. If the experiment is successful, other parts of the organization may adopt it," johnson says.

How does working in a decentralized environment affect employees' opportunities for upward mobility? johnson comments: "From a career-advancement point of view, decentralization can be a double-edged sword. Every manager is closer to bottom-line responsibility, so success and failure are more readily visible than in a centralized company. You need to be a risk-taker if you want to succeed in a highly decentralized organization." DECENTRALIZING AT CLAIRSON

Clo Ross, administrative vice-president of Clairson International, a manufacturer of household and commercial wire storage products, sits near the top of a lean and mean" corporate structure composed of herself and two other corporate vice-presidents reporting to a CEO.

Clairson, with its headquarters in Ocala, Florida, employs approximately 1,700 employees. Its household products division has nine locations in Ocala and one in Reno, Nevada, and the commercial products division has facilities in Georgia, Florida, Nevada, California, and Iowa.

Ross explains how Clairson functions: "The presidents of the two major divisions . . . go through a planning cycle each spring to devise next year's business strategy and a three- to five-year plan. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Decentralization; Rebuilding the Corporation
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.