Fundamentals of Management, 8th ed

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Part 3: Organizing

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BUILDING EFFECTIVE DIAGNOSTIC SKILLS

Exercise Overview

Diagnostic skills enable a manager to visualize the most

appropriate response to a situation. In this exercise, you’re

asked to apply your diagnostic skills to the question of

centralization versus decentralization in an organization.

Exercise Background

Managers often find it necessary to change an organi-

zation’s degree of centralization or decentralization.

Begin this exercise by reflecting on two very different

scenarios in which this issue has arisen:

Scenario A. You’re the top manager in a large orga-

nization with a long and successful history of cen-

tralized operations. For valid reasons beyond the

scope of this exercise, however, you’ve decided to

make the firm much more decentralized.

Scenario B. Assume the exact opposite of the situation

in Scenario A: You still occupy the top spot in your

firm, but this time you’re going to centralize

operations in an organization that’s always been

decentralized.