Centralized decision-making is appropriate in scenarios where consolidating decisions can lead to significant economies of scale, which involves:
* Economies of Scale:These are cost advantages reaped by companies when production becomes efficient. This can happen through increased production, lower costs per unit, bulk purchasing, and centralized processes.
* Consistency and Control:Centralized decisions ensure consistency across large-scale operations and can help in maintaining standards and controls, reducing duplication of effort, and leveraging bulk purchasing power.
In contrast, decentralized decision-making is more suitable for decisions requiring specific local context or those that need to be made frequently and swiftly.
SAFe Scrum Master References:
* SAFe Advanced Scrum Master Training Material, Chapter on Decision-Making Frameworks.