You are the Chief Operations Officer and a member of the board of directors of a reputable firm that has operations in all ten regions of Ghana. The board is currently deliberating on a strategy to decentralize the administrative function in order to promote flexibility in administration across all the operational areas of the company. You feel strongly that this move will be detrimental to the prospects of the company and has therefore spoken against it. The Chairman of the board has, therefore, asked you to submit a short memo to argue out your position.
Required:
In a memo to the Chairman of the board, explain THREE reasons why you believe your company should maintain the current centralised administrative department.                                                                (6 marks)
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                                                  MEMO
To: Chairman
From: Chief Operations Officer
Date:
Subject: Reasons for maintaining a centralised administration office
The following are reasons why the company should maintain its current centralised administration office structure:
i. Consistency – Maintaining the current centralised administration office would continue to ensure consistency throughout the organisation with regards to administrative tasks. This consistency is needful in ensuring a common organisational identity and culture. For example, the current centralised administration structure ensures that the same account codes are used no matter which part of the organisation submits an invoice. This way, everyone uses the same data and information.
ii. Security and control – The current centralised administration structure gives better security and control over operations and it is easier to enforce standards throughout the organisation.
iii. Economies of scale – The current centralised administrative structure offers the advantage of economies of scale and thus contributes to the reduction of overhead costs. For example, in purchasing computer equipment for the entire organisation, lower prices can be bargained for in addition to other benefits since a greater purchase volume positions our company to bargain for lower prices.
iv. Better understanding of operations – A centralised administration office puts Head Office in a better position to know and understand the operations of the other units within the regions. This facilitates a better strategic planning of the entire organisation.
v. Expert staff – Since administration staff are in a single location more expert staff are likely to be employed. This ensures that career paths are more clearly defined than in a decentralised system.
                                                                                                 Signed