Document Type:Essay

Subject Area:Business

Document 1

Centralization and decentralization are major components that impacts any structure of an organization, and the paper focuses on the advantages and disadvantages on these two and how they affect the British Gas Company. Different types of organizational structure and their aims are discussed together with different charts which illustrate how the organization structures are formed in which they include the matrix, functional, division and flatarchy organizational structures. Furthermore the consequences of a good and a poor organization structure are outlined clearly and how they affect the functioning of the organization. Introduction Organization structure is defined as a system that is used to characterize hierarchy inside an association. The structure characterizes each activity, its capacity and where it reports to inside the organization.

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By services which is maintenance and repairs and lastly by functions which is the customer services Gas and electricity, boilers and energy efficiency - British Gas, (2018). At the bottom of the company structure there are the operatives who are in charge to produce the product and services and are found in different departments of the company. On top of the operatives there are the team leaders who are in charge of the day to day management role. On top of the service managers or the team leaders the company has different operational managers who are responsible in setting strategy and direction for the whole organization. After the operational managers there are the area managers who are responsible for managing different areas where the organization is set up.

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Advantages and Disadvantages of Centralization and Decentralization in British Gas Company Centralization is known as the consistent reservation of authority at a central point within an organization. Decentralization on the other hand it is the division of a group of functions of activities into different units within an overall authority exercised at a central point. Both are complimentary, since there can never be either a complete decentralization or centralization. Therefore, there should always be an equilibrium between the two for efficiency functioning of the organization Sangwan, (2017). The British Gas Company uses centralization to its advantage when handling emergencies. British Gas Company utilizes both formal and informal communication on their organization structure. Formal communication is effective and help to smooth the communication system because it flows through a pre-determined channel and every person is aware of how and when to respond or send a message Menges, (2016).

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Also it helps to increase efficiency during communication in the company because organization rules and procedures are followed to the latter. Formal communication in the British Gas Company is more effective because there will be permanent records of the information. Letters, memos and reports are filed and store for future reference when making decisions for the company. This matrix structure is produced by a mix of functional hierarchical structure and the projectrized structure (Helfat, and Karim, 2014). The reason for this structure is to enable the workers to share their insight crosswise over various functional divisions which in hand creates a smooth communication and understanding between the different functions in the organization. Furthermore, it helps to increase their knowledge and also their skills, which leads to a professional growth.

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Flatarchy This type of organization structure is a hybrid which is better used in startups or small companies. This structure is a blend between the functional structure and a flat structure. Furthermore, the poor design may cause the organization to experience slow decision making processes and end up bringing stress and conflict among managers. On the other hand a good organization structure when developed by a company it has better results than a poor design. First it helps create a better communication between the different divisions in the organization hence things runs smoothly. Also, it helps the organization to have efficient task completion on different projects that will be in progress. Lastly it helps the organization to grow and expand because of good utilization of their resources.

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