Case Study (Retailing Company)
Case Study (Retailing Company)
3BSA-1
QUESTIONS:
1. What do you think of the reaction of the employees regarding the decentralization
policy of Nico?
The employees, I think, were all saddened and dismayed regarding the decentralization
policy of Nico. Change is stressful and draining in all aspects. In this case, employees have been
working on a very functional decentralized organizational structure for several years already
and the rapid change of policy will make it hard for them to cope up quickly. However, the
employees must also open their minds to the changes being presented by Nico, as the latter
was slowly introducing measures to centralize decision-making. I cannot blame them for feeling
disheartened by the swift changes but it is also necessary for the employees to be receptive of
those changes. In many cases, employees and the company must move forward with the
current changes and demands at hand.
It’ll be so uncomfortable and very difficult to transfer to the new system of management
since most of Nico’s employees have worked in the former structure, their attitudes are difficult
to alter, and attempts often lead to resistance. In this situation, a healthy discussion between
top management and employees must be initiated by Danny in order to give Nico the best place
to lie down, present and explain the new policy, as well as for employees to share their
thoughts on the new policy versus the policy they have been using for years.
2. Do you consider the decentralization policy as a big mistake? Why or why not?
Decentralization by itself is not a mistake, since it would reduce the pressure on top
management, boost oversight and monitoring, and speedy decision-making could be
implemented. Decentralization strategy or decentralization itself is an organizational
mechanism in which day-to-day activities and decision-making roles are delegated by top
management to middle-and lower-level managers within the organization, enabling top
management to concentrate more on key decisions. The need for decentralization is considered
necessary for the continuity of productive operations. It also has a number of benefits, although
it may be difficult for a business owner to give up control.
In this case, however, the abrupt shift in the system after the death of Mr. Joel Samonte
was a major mistake. After operating in a fully functioning organization, the abrupt transfer of
authority only caused harm to the company. But as workers, they need to be more open-
minded, because in the business world there is no such thing as constant. They need to cope
and learn how to adapt to these changes so that they won't be left behind.