An example would be a company in California that produces some item and another branch of the same company just miles away. If the price in one store goes up then the price in the other must also go up, or else what is to stop people from going to the cheaper store. This can turn managers against one another and in the long run only the company at large is hurt. Another example of the problems with decentralization is when a company tries a style of marketing or financing and does not tell other stores the results of his experimentation. Then a company loses money because they wind up running the same experiment and spending money twice for what was already done.
Managers can be difficult people especially if they are at the beginning of a transitional period.
Plus so many have different concerns and agendas that it s hard to come to common consensus on what is important and what needs attention, especially if money is concerned. Often times, companies don t have the strong cross-unit integrating devices. Managers hardly ever meet, they never discuss goals of he company, each individual store is trying to do the exact same thing whether it be coming up with a new product or maximizing sales. Managers need to know their place in the company. In some cases the big picture is more important than the details.