To centralize or not to centralize…
- heavy to manage: economies of scale can be insufficient to compensate for the increased cost of complexity
- demotivating for the decentralized teams
- simplicity of management for the Enterprise boss
- autonomy of the teams
- heterogeneity of the Models: staff rooted in autonomous decentralized Organizational units
- multiplication of investments
- difficulties to exchange best practices
Enterprises navigate between both forms of organization, some do not hesitate to alternate between them.
See Challenges (09/11/2013): pourquoi certains souhaitent supprimer les fonctions de support centralisées (article in French: why some would like to get rid of centralized support functions)
Centralize the Models and decentralize the Resources
A third form of organization exists which enables us to have our cake and eat it: centralize the Models to standardize the Processes, Roles and Information; but, decentralize the Resources to leave local teams with some autonomy.
Let's take some examples:
- Centralize the Process Models, the way we Produce
- Decentralize the Production in different locations
where each one manages its purchases, its staff, its
premises while respecting the Production Model
- Centralize the Offer Models (the definition of what we sell) and Distribution Models (how we sell)
- Decentralize the Distribution Resources, as happens
- Human Resources Management
- HR Management centralizes the Models: recruitment Model, training Model, evaluation Model
- Each Organizational unit applies the Model locally:
it manages its own staff while respecting the general
rules defined in the Model
The organizational structures for the Operations and Transformation are not parallel
To apply this rule:
- The Transformation teams are organized by Model group.
- The Operational teams are organized by geographic
region, or by Product line, or by Process domain.
Remark: the geographic division which was predominant in the Operations, in view of the time taken to move things around, is being gradually replaced today by a split by product line (e.g., Products for the enterprise or the individual) or by Process domain (e.g., separating Production from distribution).
The story of George the Baker is made available under the terms of the
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