Feb 10, 2021 - Grofers Revenue Climbs 111% In FY20 To Cross INR 100 Cr Mark

From the Editor's Desk

In Bad Times, Decentralised Firms Outperform Their Rivals

When there’s increased turbulence, delegating power improves sales and productivity, boosting a firm's chance of survival.

Imagine a ship at sea, at risk of sinking in a tempest. Is it better to empower the crew to do whatever it takes to save the ship, or should every decision be made by the captain and top officers? Similarly, what should the optimal form of firm organisation be during a severe downturn? The need to make tough decisions - including layoffs - may favour firms that concentrate power at the top. However, the turbulence and fast-shifting conditions magnify the value of the information held by local managers.

The two views can be compelling. Indeed, in the depths of the Great Recession of 2009, a survey of executives by The Economist Intelligence Unit revealed that decision making had become more centralised in the C-suite. The rationale: to emphasise "projects that provide benefits across the enterprise rather than individual units". But in another report three months earlier, the same publication argued that "companies have to deal with dramatically more uncertainty, complexity and ambiguity in the current recession. Success does not come from centralisation."

So who should be in charge: the crew or the captain?

Continued here

TradeBriefs: Newsletters for Decision-Makers!

Advertisers of the day

Emeritus: Take your career to a new level with PG Diploma in Digital Business | Accepting Applications

NUS Business School: Stay at the forefront of financial innovations | NUS Business School's FinTech programme

Our advertisers help fund the daily operations of TradeBriefs. We request you to accept our promotional emails.

Want the newsletters, without the promotional mailers?
Get an (ad-free) subscription to TradeBriefs Premium for just $2 per month