Ford Motor Company is currently trying to increase its global market share in automobile sales

while facing slumping market share numbers in the United States. This report examines the
Ford company characteristics and how the company uses information systems in the business
climate. To reduce costs and increase knowledge of a region Ford uses small ERP systems that
are less expensive and faster to implement than the larger ERP systems. Failure to obtain a
larger market share in foreign markets has hurt the company. The proper use of information
systems by Ford will increase their ability to maintain a successful business in future years
locally and globally.

Centralization:

• Definition: The process of transferring and assigning decision-making authority to

higher levels of an organizational hierarchy.
• In a centralized organization, the decision-making has been moved to higher
levels or tiers of the organization, such as a head office, or a corporate center.
• Knowledge, information and ideas are concentrated at the top, and decisions are
cascaded down the organization.
• The span of control of top managers is relatively broad, and there are relatively
many tiers in the organization. Compare: Fayol.

Decentralization:

• Definition: The process of transferring and assigning decision-making authority to

lower levels of an organizational hierarchy.
• In a decentralized organization, the decision-making has been moved to lower
levels or tiers of the organization, such as divisions, branches, departments or
subsidiaries.
• Knowledge, information and ideas are flowing from the bottom to the top of the
organization.
• The span of control of top managers is relatively small, and there are relatively
few tiers in the organization, because there is more autonomy in the lower ranks.

Three Forms of decentralization

• Deconcentration. The weakest form of decentralization. Decision making

authority is redistributed to lower or regional levels of the same central
organization.
• Delegation. A more extensive form of decentralization. Through delegation the
responsibility for decision-making is transferred to semi-autonomous
organizations not wholly controlled by the central organization, but ultimately
accountable to it.
• Devolution. A third type of decentralization is devolution. The authority for
decision-making is transferred completely to autonomous organizational units.

Strengths of Centralization. Characteristics

• Philosophy / emphasis on: top-down control, leadership, vision, strategy.

 • Decision-making: strong, authoritarian, visionary, charismatic.
• Organizational change: shaped by top, vision of leader.
• Execution: decisive, fast, coordinated. Able to respond quickly to major issues
and changes.
• Uniformity. Low risk of dissent or conflicts between parts of the organization.

Strengths of Decentralization. Characteristics

• Philosophy / emphasis on: bottom-up, political, cultural and learning dynamics.

• Decision-making: democratic, participative, detailed.
• Organizational change: emerging from interactions, organizational dynamics.
• Execution: evolutionary, emergent. Flexible to adapt to minor issues and changes.