I've worked in a number of organisations over the years. These organisations were many and varied but one pattern seemed to be repeated without fail.
The cycle of centralisation and de-centralisation.
This seems to be a very disruptive and expensive cycle.. The time and effort wasted on reorganising must detract from the company bottom line. I've spent some time trying to work out why this cycle happens and how to resolve it.
Both centralisation and de-centralisation has their positives and their negatives. Centralisation allows the rationalisation of processes and resources but increases the rigidity of the organisation, reducing its ability to respond to changing conditions. De-centralisation can make the company more flexible and agile but risks different segments of the organisation wasting resources through unnecessary competition.
The trouble seems to be that the people at the helm don't seem to understand the interplay of benefits and consequences. This may be due to the way that information about the organisation is presented to them. There is a belief that only simple messages can be delivered at the executive level and so they hear stark messages like 'We're too centralised, we must de-centralise' or 'We're too de-centralised we must de-centralise'. They aren't told the detail and texture.
When they hear these messages, they feel they must act decisively.
It may also be that the hardest thing in business is the same as the hardest thing in politics: Be seen to do nothing. Perhaps the only way out of this cycle is for the bosses to make smaller, more considered changes but to do that takes better communications and finer filters.
I wonder whether Service Oriented Architecture is an example of a potential business architecture that can be used to break this cycle. It balances by centralising the control of the interfaces between business units and systems, but de-centralises the system implementations. The technologies of the interfaces are centralised and controlled but the technologies of the implementations can be the ones most suited to their requirements.
Of course the SOA model can be centralised when someone imposes the implementation technologies on the business units.
I think that there is a balance that must be struck between centralisation and de-centralisation. When I find a large company that manages it I'll be fascinated to see how they achieve it.
