Decentral Operations: The Concept of the Corporation Chapter 2

Drucker makes an interesting literary decision. He introduces the benefits that he sees in decentralization in the context of one of his interviews. It moves the discussion away from his opinions and gives it the appearance of being more objective, more analytic. If you look carefully, the benefits tend to be the benefits to central management or the corporation than to individuals. They don’t quite deal with the three categories that Drucker identifies at the start of the book, though I suspect that he will return to those points and try to make the connection between the inner and outer world of the corporation.

The five benefits of having a central manager, articulated by an unidentified central executive, are:

1. The central management gets broad goals for the divisions;
2. Unifies the divisions into a whole and limits their authority;
3. Tracks progress and problems;
4. Relieves divisional directors of certain task (Financial, legal, public relations etc);
5. Offers best advice from central legal, accounting, etc staff.

All of these things can be good things but they can also seem like impositions on division leaders who are anxious to acquire more authority. The complaints can be major or they can be petty – too much red tape, interference by bean counters, and so on.