Business – 7.1 Organisational structure – Centralisation and decentralisation | e-Consult

Advantages

• Responsiveness to local market needs: Store managers can select products that match regional consumer preferences, increasing sales potential.
• Motivation and empowerment: Giving purchasing authority to lower levels boosts employee morale and encourages initiative.

Disadvantages

• Loss of economies of scale: Separate orders may reduce bulk‑buying discounts, raising unit costs.
• Inconsistent brand image: Different stores might stock divergent product ranges, weakening the overall brand coherence.