A new start-up organisation needs help on key strategic decisions, such as deciding about centralised versus decentralised structures for purchasing and supply. Assume the organisation will source from many suppliers, but will exclusively market their products to consumers in the Western Cape, with primary focus on the urban hub of Cape Town. Which one of the following options would rationalise the decision on the purchasing and supply structure in a start-up organisation?

Question

Answer

Centralisation often results in a duplication of staff and facilities, while decentralisation will ensure a leaner organisational structure.

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Centralisation will result in slow response times to regional plants, while decentralisation ensures faster response times.

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Decentralisation generally reduces negotiating power, while centralisation allows greater negotiating power.

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A decentralised structure is preferred to ensure that economies of scale are achieved, while centralisation will result in a loss of economies of scale.

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A new start-up organisation needs help on key strategic decisions, such as decid...

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