The decision of centralisation vs decentralisation of functional resources has been a regular evaluation by small and large businesses for decades. No company is fully centralised or decentralised, instead there are varying degrees of both.
The amount of centralisation that’s right for a company depends on its size, culture and strategy. If a company is wrong about the timing and fit for centralisation, it can suppress responsiveness, limit the ability to locally customise products and services, and burden business units with higher costs. On the other hand, insufficient centralisation can deny business units the lower cost structure or coordinated strategies needed to win global customers. So, how do you know the time is right for a change?
As with any business change, there are several variables that need to be understood before moving forward. This article will briefly provide some background on the case for centralisation, when is the right (and wrong) time, and an implementation methodology. Let’s first level set with a few definitions that will be utilised throughout this article.
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