Question

1. In what ways does this example illustrate the virtues and liabilities of alternative organizational structures when it comes to centralization and standardization?

2. What are some of the disadvantages of centralized structures that might make it more difficult for the big burger chains to be successful?

Answer 1

Answer:

In following ways this example does illustrates the virtues and liabilities of alternative organizational structures when it comes to centralization and standardization as below

· Centralization and standardization structure helps in developing the common structure across all the working sites of the organization at multiple locations.

· Centralization provides a common approach and procedure for executing the functional processes to achieve the business objectives. For example Supply chain management will be common process across all the working sites of the organization. Common recruitment will be carried out from one location for the entire organization business needs at multiple site and plants in the nation.

· Standardization will help in common processes, policies and system across all the working sites of the organization. Example SAP will be the ERP software that will be used across all the working sites at global level,

· Standardization will help in global learning and machines and production sites will be similar and in the optimized way to produce the productivity at desired level across global operations.

· All the plants of the organization will not have any alternative structure and they will be having one common, centralized and standardized structure across the business at global level.

Some of the disadvantages of centralized structures that might make it more difficult for the big burger chains to be successful are as below

· The local needs and requirements of the individual plant or sites will not be managed completed i.e.100% and they will find some of the major issues that they are not able to manage due to centralization and standardization. Like Local technical capability to manage the global IT system and processes at individual plant level.

· The centralized purchasing will have high lead time that will limit the functionality of the individual plant location.

· The centralized and standardized structure will create a problem in managing the emergency which is out of control of management, as it comes suddenly and does not wait for the centralized and standardized process to support it.

· Centralized and standardized structure are not able to manage minor requirements effectively.