Video [6:13 min} Centralization vs. Decentralization

Synopsis: What are the strengths and weaknesses of a business where the decision structure is more decentralized compared to more centralized?

View this video from communication coach Alex Lyon and go over Section 7.5 again, paying particular attention to the conditions in which decentralization is suggested as more desirable than centralization.

What kinds of organizations would you think are best suited to each degree of centralization? For example, the text suggests that sizeable corporations such as General Electric, Ford or ExxonMobil, or ones that are geographically dispersed, such as Nordstrom, Caterpillar, and again, Ford, are good candidates for decentralization.

But often very large government organizations such as the military have highly centralized command and control structures. The same could be said for what is ideal during a crisis. Consider how the United States centralized many different government agencies into the Department of Homeland Security subsequent to the terrorist attacks on September 11, 2001.

Although history is still being written as this is published, contrast this to the blended approach taken by the United States during the COVID-19 pandemic, wherein the individual leadership of the states and territories of the U.S. was greatly empowered by the federal government to make decisions that were more local in nature, while both national heath guidelines and significant assistance with supplies, equipment and medical facility deployment was handled by the central authority in Washington, D.C.

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