Decentralized Structure of Fairfax Financial Holding Limited

ORGANIZATION AL BEHAVIOR:
1
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The decentralized structure of Fairfax financial holding limited

Organizational Behavior: 2
Fairfax financial holdings limited company work under a decentralized
structure to run the business. According to Rachel, Duran & Saltman, (2018)
decentralization involves the transfer of formal responsibilities and authority to
make crucial decisions regarding the management, performances, and delivery of
the services to employees. Decentralized governance provides employees with the
freedom to act and create an organization where every employee is almost equal at
all levels. The organization hierarchy structure is not that long. In the case of Fairfax
Financial holding limited it is found that the organization operates under
decentralized structure. The company creates an autonomous management team to
apply the strategy to markets (“Corporate-Company Profile,” n.d.).
The guiding principles also show that the organization under Fairfax's
financial limited is run with regard to decentralized structure (“Corporate-Guiding
Principle,” n.d.). The organization operates under a decentralized structure and it is
driven by the president except in some areas of evaluation for performance,
handing over the planning, financing as well as an investment that is carried out by
the Fairfax employees. One good example is that allied world that was acquired by
the Fairfax financial holdings limited but it is allowed to work on a decentralized
structure and this approach helps the organization to minimize the integration and
execution risk after the acquisition. This discussion clearly shows that the company
utilizes a decentralized approach to make its decisions.
The wide span of control in FFH
From question one discussion it is clearly evident that there is a wide span of
control that holds the company. First, there is the delegation of power as well as
responsibilities to the employees to help them make a decision without necessary

Organizational Behavior: 3
going through the top-level management. Employees are entrusted with the
amount of power given to them by the management. Secondly, there is a quick flow
of information and communication in either direction. Improvement of
Communication from top to bottom and flow bottom to top is evidently. Finally,
Fairfax's financial hold limited operates with very few managers since there are
very few levels of departments. Operating in this manner help the organizations to
reduce the cost of paying a large number of managers (“Synchronous Automatic
Motion Control for Wide-Span Implement Carrier (WSIC),” 2014)
Division Structure Practiced By FFH
As discussed in question one above the company is fully run using
decentralized structure. This shows that the organization uses a divisional structure
for gearing the business. Before even reaching the conclusion it is essential to
comprehend the difference between functional, divisional as well as a matrix
structure. In functional structure the institution is divided into smaller groups
according to the area of specialization. In some cases, functional structure is
referred to as silos that symbolize things that are vertical and disconnected. For
instance, the top-level manager has several people that are connected to him/her
and these people are not connected at any point. The communication always flows
from the top and therefore is passed to various departments before reaching the
subordinates. The challenge with this kind of structure is that there is
communication breakdown among departments and narrow focus toward achieving
business goals. Therefore, the functional structure operates in a centralized
approach where the institutional structure is divided into a smaller department.