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Decentralization is the process of doing what?
ASplitting a firm into legally separate companies
BMoving factories away from the head office site
CSelling divisions that do not earn a target return
DPushing decision-making authority down the hierarchy
Answer & Solution
Correct answer: D. Pushing decision-making authority down the hierarchy
1. Decentralization is about where decisions are taken, not about where buildings sit or who owns what.
2. It pushes decision-making authority down the organizational hierarchy.
3. Lower-level personnel gain more responsibility and power to make and implement decisions.
4. Legal separation, relocation, and divestment are corporate actions rather than a degree of centralization.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 7 "Designing Organizational Structures", section 7.5 Degree of Centralization_
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