What characterizes a decentralized organization?

A decentralized organization is characterized by the distribution of decision-making authority among various departments or units rather than concentrating power at the top level. This structure allows managers at different levels, particularly those who are closer to the operational aspects of the business, to make important decisions that can lead to faster response times, greater innovation, and higher employee morale.

In such organizations, departments or divisions may have the autonomy to tailor their strategies and operations to better serve their specific markets or functions. This approach encourages empowerment and accountability among employees, enabling them to take ownership of their decisions and actions, which can drive overall organizational effectiveness.

In contrast, centralized organizations retain decision-making authority at higher levels, which can sometimes lead to slower responses to changes in the marketplace or individual operational needs. Thus, the correct choice emphasizes the distribution of power and responsibility that is fundamental to the decentralized structure.