Business – 7.1 Organisational structure – Types of structure | e-Consult

Answer: A centralised structure concentrates decision‑making authority at the top levels of the hierarchy. This often leads to slower decision‑making because proposals must pass through several layers of approval, but it ensures consistency and tight control over strategic direction. Employee motivation may be lower because staff have limited autonomy and fewer opportunities to influence outcomes.

In contrast, a decentralised structure distributes authority to lower levels or regional units. Decisions can be made more quickly as they do not need to be routed to senior management, and employees often feel more empowered, which can boost motivation and commitment. However, decentralisation can create inconsistencies in policies and a loss of overall strategic coherence.