This paper will discuss in what ways can (a) flattening the hierarchy (b) centralizing/decentralizing authority can help an organization like Xerox to improve its performance. Next, this paper will explain what kinds of factors change the decision to centralize or decentralize authority over time in a fast-changing environment such as the digital document services industry.
In 2007, Xerox CEO Ann Mulcahy, used wisdom when choosing Ursula Burns as Xerox next CEO. Ursula Burns technical knowledge and knowledge of Xerox mechanics and products made her an excellent executive choice.
Burns has spent over a decade training, learning, and compounding thoughts of how to expand Xerox reputation and product sales. Ursula Burns contributed in overseeing corporate strategy, global accounts, IT and human resources, npr.com,2009, at Xerox and began working side-by-side with Ann Mulcahy in 2001.
Burns shared this statement when she spoke at Oregon State University. “We are poised for greatness and for success. We have pulled ourselves back from the brink of bankruptcy and taught ourselves that we can do just about anything we aspire to do, if we work hard and put our head down.”(npr.com/Burns, 2009).
To reshape Xerox and to avoid bankruptcy required Mulcahy and Burns had to flattened the hierarchy.
Authority gives one power over other people groups, employees, and staff. Businesses must be careful having multi-powerful executive members determining the faith of the business. Too many executives (Presidents, vice-president, asst vice-presidents, etc.) in Xerox opens too many opinions and too many business decisions.
To control the volume of opinions and decision-making the CEO must shrink the number of executive members beneath her. Narrowing the number of executives will decrease the salary cost and future communication confusion within Xerox departments.
To shrink costs Mulcahy was forced to flatten Xerox’s management hierarchy and restructure its operating components that reduced the number of employees from 95,000 to 55,000 and cut 26% from corporate overhead. This restructure is an excellent start to redesigning Xerox. Mulcahy and Burns carefully express delegating centralization versus decentralization.
“Many studies have shown that when more authority and responsibility is given to managers and employees, they are more motivated to perform their organizational roles, other things being equal” (Jones, 2013).
Centralizing and decentralizing authority is determined by the top authority (owner, CEO, President) of the organization In centralizing, the managing function is through the central office – typically the headquarters. There are many organizations managers are at the top of the hierarchy holding all power to make important decisions. Lower-level management and employees take orders from the top, and held accountable for how well they obey orders. Lower-level management have no authority to make new decisions or actions to use resources for purposes that they believe are important.
In decentralizing, the managing function is at the local level – an office or department outside of central management (Evans, 2018). Authority is highly decentralized. when the authority to make important decisions about organizational resources and to initiate new projects is delegated to managers at all levels in the hierarchy. Decentralization promotes flexibility and openness by allowing lower-level managers make quick decisions.
Xerox managers remain accountable for their actions and have the opportunity to accept greater responsibilities and take potentially successful risks. When authority is decentralized, managers can demonstrate their personal skills and capabilities because they can make important decisions. They may be more motivated to perform well for the organization.
The downside of decentralization is when giving too much authority to delegated managers at all levels can make their own decisions, planning and coordination become very difficult. Thus too much decentralization may lead an organization to lose control of its decision-making process!
Anne Mulcahy and Ursula Burns rectified the financial issues that needed revision to correct the loss of the entire company. Mulcahy and Burns agreed to balance between centralization and decentralization of authority for the middle and lower managers to make important decisions. The top managers primary responsibility is managing long-term strategic decision making. The result is a good balance between long-term strategy making and short-term flexibility and innovation as lower-level managers respond quickly to problems and changes in the environment as they occur.
Centralization becomes a problem when top managers become burdened and absorbed in operational decision making about daily resource issues (such as hiring people and obtaining inputs). Top managers have little time to spend on long-term strategic decision making when burdened and absorbed. and planning crucial future organizational activities, such as deciding on the best strategy to compete globally, is neglected.
Factors that change the decision to centralize or decentralize authority are
This paper discusses Xerox company is redesigned after facing possible bankruptcy and the lay-off of all employees. After Mulcahy and Burns new product design and consumer research this paper explains the sacrifices and hierarchic flattening that resolved. This paper discusses how the centralization and decentralization of authority of the company effects the functioning of the company. After further research we found 11 factors that change the decision to centralize or decentralize authority. Factors that change the decision to centralize or decentralize authority are
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