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23. In the business world, it is believed that entrepreneurship and divisional autonomy go hand in hand. Therefore, decentralization is prevalent. For example, Johnson and
23. In the business world, it is believed that entrepreneurship and divisional autonomy go hand in hand. Therefore, decentralization is prevalent. For example, Johnson and Johnson Company is composed of more than 100 independent/decentralized sub-organizations. However, the delegation of decision-making authorities to the lower levels can cause problems too. There is a famous story. Daewoo Shipbuilding (a South Korean company) went to a point of near bankruptcy. Its labor costs had risen four times during a decade. One bad thing happening in the workplace was that workers had their haircuts free during work hours. Double disadvantages! Haircuts cost the company and haircuts during work hours made the company lose valuable labor time. Finally, the Daewoo Conglomerate's headquarters took it over, and the company would not be a decentralized unit of the conglomerate anymore. After headquarters took it over, the first thing done was to eliminate all barbershops inside the company. That action only saved the compa
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