A decentralized organizational structure allows decision-making authority to be distributed across
various levels and locations, making it more flexible and adaptable to rapid changes and
uncertainties.
Step-by-Step Justification:
Why Decentralization Helps in Uncertainty?
Decentralization empowers different units or teams to make faster decisions.
It enables quick adaptation to market shifts, technological advancements, and external disruptions.
According to IIA’s Organizational Governance Guidelines, decentralized structures increase agility
and responsiveness, particularly in dynamic industries like technology and finance.
Characteristics of Decentralized Structures:
Autonomy at multiple levels – decisions are not centralized at the top.
Faster decision-making – local teams react quickly to changes.
Greater innovation and flexibility – promotes problem-solving without bureaucratic delays.
Why Not Other Options?
B . Centralized:
A centralized structure concentrates decision-making at the top, slowing down responsiveness to
changes.
C . Departmentalized:
While departmentalization organizes work efficiently, it may restrict cross-functional collaboration,
making adaptation slower.
D . Tall Structure:
Tall structures have multiple management layers, leading to bureaucracy and slower decision-
making.
IIA Reference:
IIA Practice Guide: Organizational Governance
IIA Standard 2110 – Governance and Risk Management
COBIT 2019 – Enterprise Risk and Governance Framework
Thus, the correct and verified answer is A. Decentralized.
