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Organizational Design - Decentralization

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Added on  2022-08-11

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Read the following article to answer the discussion questions (link below). Foss, N. J., Lyngsie, J., & Zahra, S. A. (2015). Organizational design correlates of entrepreneurship: The roles of decentralization and formalization for opportunity discovery and realization. Strategic Organization, 13(1), 32-60. “Organizational design correlates of entrepreneurship: The roles of decentralization and formalization for opportunity discovery and realization” (Links to an external site.) In our opinion, which is more important for opportunity discovery and realization…formalization or decentralization? Defend your answer. Based on your reading of the article, if you wanted to encourage entrepreneurship in your organization, what type of organizational design would you implement? How would you go about implementing your design?

Organizational Design - Decentralization

   Added on 2022-08-11

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Running head: ORGANIZATIONAL DESIGN
ORGANIZATIONAL DESIGN
Name of the Student
Name of the University
Author Note
Organizational Design - Decentralization_1
ORGANIZATIONAL DESIGN1
Through an in-depth reading, it is observed that Decentralization is more important
for opportunity discovery and realization. Decentralization is identified as the authority that
makes resource allocation decisions relevant to the realization that is assigned to personnel at
lower levels as well as the managers of the hierarchal level of the organization (Foss, Lyngsie
& Zahra, 2015). Decentralization is associated with the combination of knowledge sourcing
that is centralized at the levels of economic aspects and are related to the communications
and high coordination between the layers of hierarchy. Furthermore, it gives the managers a
power of autonomy and discretion that is required in the realization and recognition of the
opportunities. Whereas, Formalization enables the authentic codification and authoritative
standardization of actions and processes (Foss, Lyngsie & Zahra, 2015). As per the designs of
organization, decentralization and autonomy are complementary to each other in case of
explorative activities such as in the forum of internal venturing of the corporate sectors that
might lead to the exploration of entrepreneurial opportunities. The approach of the
decentralization promotes the innovative activities of the organization and further it is
expected to promote the opportunity reaction as well (Foss, Lyngsie & Zahra, 2015). When
decentralization become high, the manager gains greater discretion and latitudes in the
customization of the mode, process, and timing of realization that ultimately develops a
favourable success factors. However, in the perspective entrepreneurial aspects, formalization
may undergo contradictory attitudes depending upon the circumstances. In certain cases, the
efforts of formalization may facilitate with clear understanding of cause and effect
relationship leading to successful realization and discovery (Foss, Lyngsie & Zahra, 2015). It
increases the aspects of internal predictability and supports the enforcements of internal
agreements among the departmental divisions. At times, the process of formalization speed
up the realization and discovery of the opportunities by facilitating the model of well-
coordinated investment, complementary assets and actions (Foss, Lyngsie & Zahra, 2015).
Organizational Design - Decentralization_2

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