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Wipro Technologies, one of India's largest IT solutions providers, restructured its organization in its bid to compete globally with giants like IBM and Accenture. This restructuring aimed to improve customer orientation and operational efficiency, critical to Wipro's ambition of becoming a global technology leader.

The company transitioned from a centralized management system to a decentralized structure, dividing its operations into several self-sufficient subsidiaries focused on specific product lines, such as telecommunications, engineering, and financial services. Each subsidiary operates independently, managing its personnel, accounting, and administrative functions. This decentralization empowered business leaders to take greater responsibility for growth and eliminated an entire layer of executives to streamline operations.

Azim Premji, Wipro's then-chairman, emphasized the importance of this shift, noting that it gave leaders more autonomy and enhanced decision-making at the operational level. This organizational change helped Wipro achieve specialization and allowed better alignment of resources with customer needs.

Despite the advantages of decentralization, including flexibility, faster decision-making, and enhanced accountability, it also posed challenges, such as coordination among subsidiaries and maintaining consistency in strategic objectives. Wipro addressed these challenges by clearly defining roles and responsibilities across its new structure.

How did decentralization benefit Wipro?

Solution

✅ Correct Option: 3

Option 1 -> Increased consistency in decisions - Decentralization typically leads to varied decisions across units rather than consistency, which is more associated with centralized control.

Option 2 -> Improved employee retention - While this may be a secondary benefit, it is not the primary advantage of decentralization for organizational performance.

Option 3 -> Faster decision-making and greater flexibility - Decentralization empowers local units to make decisions quickly without multiple approval layers, enabling rapid response to market changes and customer needs.

Option 4 -> Reduced investment in subsidiaries - Decentralization relates to decision-making authority distribution, not investment reduction in subsidiaries.


Hence, Option 3: Faster decision-making and greater flexibility -> Decentralization allowed Wipro to push decision-making authority to individual business units and lower management levels. This eliminated bureaucratic delays, enabled quicker responses to market opportunities, and provided greater flexibility to adapt to local conditions and customer requirements, ultimately improving organizational agility and competitiveness -> correct

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