Centralization And Decentralization In The Ford Motor Company

One of the key elements in an organizational design is centralization and decentralization. These two elements are related to the decision making of the company. Decision-making is about authority; whether it should involve only the senior management at the center of a business or vice-versa. An association can either be centralized, in which the degree of decision making is focused on the higher level of organization and the sources are allocated at the central authority, or decentralized in which power is assigned down the ranks. Centralization which is also called as command-and-control, is formerly the most typical structure for nearly all company. This structure lean on the company’s owner or higher level executives to make most of the

This is very important especially to a very well-establish company in order to maintain their reputation and the employer-employee relationship. For instance, when a person or a department at the top managers taking the responsibility of making and implementing critical decisions, they keep apart other employees from the burden of making risky or unfavorable decisions. If many employees and levels in the organization get involved in decisions, more potential occurs for conflict and difference in implementation and what’s worse is that the employee will be blamed by the top

In other words, when all the tasks are complete, the final decision and approval are all done by the board of directors. They have layers of organizational chart that displays the authority of the organization and this shows how Ford practicing centralization in their company. Their lower-level staff has very less participation in making decision towards the company. With fewer people involved in discussing and deciding on strategy and action, centralized organization usually react faster to a marketplace. The upper level can gather information and materials, then efficiently discuss pros and cons of decisions in a small group. This makes the communication and decision-making process more efficient. Once decisions are made, top managers send out directives to lower levels for implementation as directed.

The structure is being done because it contributes to company’s sustainability and progress. Consequently, it provides unbiased and standardized allocation of work as well. By implementing centralization, the outcome of work distribution in the company will be the fairness of behavior that is for certain with a constant judgement. There is an immediate favorable circumstance if a manager who takes care of an area is an expert in that field. This will ease the work distribution process within the other levels of the