Decentralization makes your organization faster and nimbler. But you can’t do that with every decision, so how do you decide which decisions to keep centralized?—Harvard Business Review. The decision has to depend on the organizational goal that is being set, and one way to think about organizational goals is by considering 4 organizational qualities that all organizations can relate to as a goal and determine the composition of which the organization is leaning towards.
A summary description of the 4 organizational qualities.
- Responsiveness. The goal of the organization is to ensure that the right action is taken quickly in response to opportunities and threats.
- Reliability. The goal of the organization is to align its operating units with the company’s overall objectives, and make the business more predictable.
- Efficiency. The goal of the organization is to carry out its operations more economically through aggregation of its operating units.
- Perennity (or sustainability over time). The goal of the organization is to ensure that a certain standard or quality of the organization is preserved over sustained periods of time.
The complete framework is included below; click on it to read the full article at Harvard Business Review.
While there are certainly no hard and fast rules to manage an organization, the framework does act as a handy tool for decision making, especially when the next decentralization discussion makes its appearance again on the meeting agenda.