Exam date:15/8/2021

 Discuss the advantages and disadvantages of having a high level of decentralization

when designing organization structure for a company. What should companies consider
when determining the degree of decentralization?
Advantages of High Level of Decentralization:
1. Faster Decision-Making: Decentralization allows decision-making authority to be distributed to
lower levels of the organization. This can result in faster decision-making as individuals closer to
the operational level can make quick decisions without needing to consult higher-level
management.

2. Enhanced Flexibility and Adaptability: Decentralization empowers local teams or departments

to respond quickly to changes in the market or customer needs. They can adapt their strategies,
processes, and products/services without waiting for directives from the central authority. This
flexibility can lead to improved innovation and competitiveness.

3. Improved Employee Morale and Engagement: Decentralization provides employees with a

sense of ownership and autonomy over their work. It allows them to be involved in decision-
making and have more control over their tasks. This increased empowerment can lead to higher
job satisfaction, motivation, and engagement.

4. Better Customer Responsiveness: When decision-making authority is pushed closer to the

customer-facing teams, it enables them to respond quickly to customer inquiries, feedback, and
requests. Decentralization can help organizations be more responsive to customer needs,
leading to higher customer satisfaction and loyalty.

Disadvantages of High Level of Decentralization:

1. Lack of Coordination and Standardization: Decentralization can lead to silos and a lack of
coordination between different units or departments. Without proper communication and
coordination mechanisms, it may be challenging to ensure consistency in decision-making,
processes, and policies across the organization.

2. Potential Duplication of Efforts and Resources: Decentralization may result in different units
or departments working independently and duplicating efforts or resources. This can lead to
inefficiencies, increased costs, and a lack of economies of scale that could have been achieved
through centralized coordination.

3. Risk of Inconsistent Decision-Making: When decision-making authority is dispersed, there is a

risk of inconsistent decisions being made across the organization. Different units may have
varying levels of expertise or interpretations of the company's goals, leading to suboptimal
outcomes or conflicting strategies.

4. Loss of Centralized Control: High levels of decentralization can reduce the control and
oversight of top-level management. This can make it challenging to enforce company-wide
policies, ensure compliance with regulations, and maintain a cohesive organizational culture.

Factors to Consider when Determining the Degree of Decentralization:

1. Organizational Strategy: The company's strategic objectives and goals should align with the
chosen degree of decentralization. If agility, innovation, and quick decision-making are critical, a
higher level of decentralization may be appropriate. Conversely, if standardized processes, cost
control, or risk mitigation are key priorities, a more centralized structure may be necessary.
2. Organizational Size and Complexity: Larger organizations with multiple business units or
divisions may find it more challenging to maintain coordination and control with a high level of
decentralization. The size and complexity of the organization should be considered when
determining the appropriate degree of decentralization.

3. Skill and Expertise Distribution: Decentralization requires capable and empowered

employees at various levels of the organization. The skills and expertise available within the
organization should be assessed to determine if decentralization can be effectively
implemented.

4. Industry and Market Dynamics: The industry in which the company operates and the
competitive landscape can influence the degree of decentralization. For example, industries with
rapidly changing markets or high customer expectations for customization and personalization
may benefit from a higher level of decentralization.

5. Information and Communication Technology: The availability and effectiveness of information

systems and communication technology play a crucial role in enabling decentralized decision-
making. Robust communication channels and efficient information sharing platforms are
essential to support effective collaboration and coordination.

It's important to note that the degree of decentralization is not an all-or-nothing concept.
Companies can choose to adopt varying degrees of decentralization in different areas or
functions of the organization based on the specific needs and considerations of those areas.

 Suppose you are asked by a senior manager of your company to identify ways to
reinforce a new culture of teamwork and collaboration. The board of management clearly
supports these values, but it wants everyone in the organizations to embrace them.
identify four types of activities that would strengthen these cultural values.
To reinforce a new culture of teamwork and collaboration within an organization, there are
several types of activities that can be implemented. Here are four examples:

1. Team-Building Workshops: Organize team-building workshops or retreats where employees

from different departments or teams can come together to engage in activities and exercises
designed to promote collaboration, trust, and effective communication. These workshops can
include team-building games, problem-solving challenges, and opportunities for open
discussions to foster a sense of camaraderie and cooperation.

2. Cross-Departmental Projects: Encourage cross-departmental collaboration by initiating

projects that require teams from different departments to work together towards a common goal.
This not only promotes collaboration but also helps employees gain a better understanding of
each other's roles, expertise, and challenges. The projects can be designed to encourage
sharing of knowledge, joint problem-solving, and collective decision-making.

3. Knowledge Sharing Sessions: Organize regular knowledge sharing sessions where

employees have the opportunity to share their expertise, best practices, and lessons learned
with their colleagues. This can be done through presentations, workshops, or online platforms.
Encouraging employees to share their knowledge and experiences creates a culture of
collaboration and learning, fostering an environment where everyone benefits from each other's
expertise.

4. Recognition and Rewards for Collaborative Efforts: Implement recognition and reward
programs that acknowledge and celebrate employees who demonstrate outstanding teamwork
and collaboration. This can be done through peer recognition programs, team-based incentives,
or awards for collaborative achievements. Recognizing and rewarding individuals and teams for
their collaborative efforts reinforces the cultural values and encourages others to embrace them
as well.

It's important to note that creating a culture of teamwork and collaboration requires consistent
effort and ongoing reinforcement. These activities should be supported by leaders who model
the desired behaviors, effective communication channels that facilitate collaboration, and an
organizational structure that promotes cross-functional interactions.

 You just closed a deal with an organization client, and this helps you achieve the target
that was set for you by the unit. Use expectancy theory to discuss how the events that
will follow may increase your motivation and engagement.
According to expectancy theory, motivation is influenced by three factors: expectancy,
instrumentality, and valence. Let's apply this theory to discuss how the events following the
successful deal with the organization client can increase your motivation and engagement:

1. Expectancy: Expectancy refers to the belief that your efforts will lead to successful
performance. In this case, closing the deal with the organization client indicates that your efforts
have paid off, and you have achieved the desired outcome. This success enhances your
expectancy, as you now believe that your future efforts can lead to similar positive results. As a
result, your motivation is likely to increase because you have a greater confidence in your
abilities to perform well.

2. Instrumentality: Instrumentality refers to the belief that successful performance will result in
rewards or desired outcomes. Closing the deal and achieving your target signifies that you have
met or exceeded expectations, which is likely to be linked to rewards or recognition in the
organization. The instrumentality is strengthened when you perceive that the rewards or
outcomes are valuable and meaningful to you. For example, the rewards could be financial
incentives, career advancement opportunities, or recognition from your superiors. The
anticipation of receiving these rewards increases your motivation and engagement as you see a
direct link between your performance and the desired outcomes.

3. Valence: Valence refers to the value or desirability an individual places on the rewards or
outcomes. The perceived value of the rewards associated with achieving your target plays a
crucial role in motivating and engaging you. If the rewards are highly valued by you, such as
significant financial incentives or public recognition, the valence is high. This high valence
increases your motivation and engagement because you are motivated to work towards similar
successes in the future to attain the desirable outcomes.

In summary, the events following the successful deal with the organization client can increase
your motivation and engagement through the expectancy theory:

- The success reinforces your belief in your abilities to perform well (expectancy).
- You perceive a direct link between your successful performance and the rewards or outcomes
that will follow (instrumentality).
- The rewards or outcomes associated with achieving your target are highly valued by you
(valence).

As a result, you are likely to be more motivated and engaged in your work, striving to achieve
further successes and replicate the positive outcomes in the future.

No exam date
 What are possible antecedents and consequences of organizational commitment? What
implications does it have for management?

Organizational commitment refers to an individual's psychological attachment and loyalty

to an organization. It plays a crucial role in shaping employee attitudes, behaviors, and
overall performance. There are several antecedents and consequences of organizational
commitment, each with its own implications for management. Here are some examples:

Antecedents of Organizational Commitment:

Job Satisfaction: Employees who are satisfied with their jobs are more likely to develop a
strong commitment to the organization. Management can focus on creating a positive
work environment, providing meaningful work, and recognizing employee contributions
to enhance job satisfaction.

Organizational Support: When employees perceive that their organization values and
supports their well-being, they are more likely to exhibit commitment. Managers can
promote supportive policies, fair treatment, and open communication to foster a sense of
organizational support.

Leadership: Effective leadership that inspires trust, provides direction, and recognizes
employee achievements can significantly influence organizational commitment.
Managers should strive to be transformational leaders who motivate and engage their
team members.

Employee Involvement: Organizations that encourage employee involvement in

decision-making and provide opportunities for participation tend to have higher levels of
commitment. Managers can involve employees in goal-setting, problem-solving, and
decision-making processes to increase their commitment.

Consequences of Organizational Commitment:

Employee Retention: High levels of organizational commitment are associated with

lower turnover rates. Employees who are committed to the organization are more likely
to stay and contribute to its long-term success. This reduces recruitment and training
costs for the organization.

Job Performance: Committed employees tend to perform better in their roles. They are
more motivated, engaged, and willing to go the extra mile to achieve organizational
objectives. Managers can leverage organizational commitment to improve overall
performance and productivity.
 Organizational Citizenship Behavior (OCB): Committed employees often engage in
discretionary behaviors that go beyond their formal job requirements. They voluntarily
help colleagues, support organizational initiatives, and exhibit positive workplace
behaviors. Management can encourage OCB by recognizing and rewarding such
behaviors.

Psychological Well-being: Employees with a strong sense of commitment often

experience higher levels of job satisfaction, psychological well-being, and reduced
stress. Management can promote commitment to create a positive work environment
that enhances employee well-being.

Implications for Management:

Building a Positive Organizational Culture: Managers should strive to foster a positive

organizational culture that values and supports employees. This includes creating a
supportive work environment, promoting a sense of belonging, and recognizing
employee contributions.

Effective Leadership Development: Organizations should invest in developing effective

leaders who can inspire and engage employees. Leadership training programs can help
managers understand the importance of their role in shaping employee commitment.

Employee Engagement and Empowerment: Management should focus on involving

employees in decision-making, providing opportunities for growth and development, and
empowering them to take ownership of their work. This helps foster commitment and
increases overall engagement.

Recognizing and Rewarding Commitment: Managers should acknowledge and reward

employees' commitment to the organization through various recognition programs,
career development opportunities, and fair compensation practices. This reinforces the
importance of commitment and encourages its further development.

By understanding the antecedents and consequences of organizational commitment, managers

can implement strategies to enhance commitment levels among employees, leading to
improved performance, retention, and overall organizational success.