Certification in Supplier Diversity Practice Exam

In a decentralized organizational structure, where is authority primarily assigned?

1. A central supply organization

2. Individual functions or managers

3. A specialized supply management team

4. External vendors with various expertise

The correct answer is: Individual functions or managers

In a decentralized organizational structure, authority is primarily assigned to individual functions or managers. This means that decision-making power and responsibilities are distributed across various departments or teams rather than being concentrated in a central authority. Each function or manager is empowered to make decisions that align with their specific area of expertise or operational needs. This approach allows for greater flexibility and responsiveness to local or departmental needs, as managers who are closer to the day-to-day operations can make informed decisions that better suit their specific context. The decentralized structure can enhance innovation, agility, and accountability since managers are often more familiar with the challenges and opportunities within their own functional areas. In contrast, a central supply organization or a specialized supply management team would imply a more centralized decision-making process, where authority is concentrated in a single entity, leading to slower responses to departmental needs. Similarly, assigning authority to external vendors would further shift decision-making away from the internal management structure, which does not align with the principles of decentralization.