What is a potential risk of local branches operating independently in a decentralized organization?

The choice that highlights a potential risk of local branches operating independently in a decentralized organization is the competition among branches. In a decentralized setup, while local branches have the autonomy to make decisions that best suit their immediate markets, this can lead to situations where branches may pursue conflicting objectives or compete for the same customers. This rivalry could undermine the overall coherence of the organization’s strategy and dilute the brand’s unity, ultimately affecting the organization's performance and corporate image.

In contrast to this choice, the other options indicate potential benefits. Increased corporate image and enhanced communication suggest positive outcomes from a cohesive brand strategy rather than the challenges presented by independent operations. Focused decision-making, while beneficial, does not address the risk of competitive strife between branches, but rather underscores the advantage of localized decision power. Thus, the risk of competition among branches represents a significant downside of a decentralized structure.