We now examine those factors which have changed in the environment to promote decentralization.
Over the past two decades, global competition has increased tremendously within many industries. Consider, as examples, the automobile, cellular devices, and computer industries. This competition has placed pressures on firms to cut costs, produce higher-quality products, and meet the demands of customers in a more timely fashion. The information for improving quality, customer service, and efficiency often is located lower in the organization. Thus, these competitive pressures have increased the benefits of decentralization for many firms.