The purpose of organisation structure is a system adopted to delegate activities and allocate them to respective sub-units, followed by the coordination and control of these activities to achieve organisational goals. An organisational structure is defined as the outline of framework and guidelines for managing operations and has been categorised by centralised and decentralised form on business structure. Dearden (1981) explained that the conceptual framework needs to be identified to understand the implications of dispute.
With ABC Corporation consisting of many division managing different market portfolios within the company, ...view middle of the document...
Centralised Decision Making
Hierarchical structure reflecting high power distance (PD) illustrates tolerance for seniority in the organisation (Hofstede, 2001). In ABC Corporation, employees are conscious of the various positions held within the organisation, members who are junior in positions tend to feel oblige in obeying the rules and guidelines set by senior management.
In ABC, the board of directors may have their own views on what business strategy the company should adopt, but even with the majority view, decision making lies absolute on the Chief Executive Officer (CEO). This has allowed strategies to be adopted even when the respective heads of different business units do not believe in it. This tolerance acceptance of decisions made by the highest hierarchy is very apparent within the company. In association with Charles Handy analogy on power culture, decisions are made by the CEO who commands and all major decisions from the respective decisions must be referred to this individual for approval.
Referencing to the Max Weber’s theory of bureaucracy, it has been explored that most people tend to obey orders in organisations because they accept the power as legitimate. In such traditional authority, members of the organisation accept the power due to their customs of obeisance and are likely to adhere to direction favourable to the leader. It has been argued that Weber’s concept of bureaucracy failed to identify the social needs of individuals.