Centralization and Decentralization - Kickoffall Info Hub

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Monday, October 7, 2019

Centralization and Decentralization


Centralization is the degree to which decision-making is concentrated at a single person in the organizations. In the organizations with a high level of centralization, top managers make all important decisions and the subordinates work for implementing those decisions.
Decentralization
Centralization is the degree to which the involvement in decision-making is dispersed throughout the organizations. Decentralization increases the employee empowerment which is the decision-making authority (power) of employees.
Factors and situations that Influence the Degree of Centralization
More Centralization is advisable when:
Lower-level managers are not as talented and competent at making decisions as upper-level managers.
Lower-level managers are not willing to be part of decision making
Organization is at a critical phase
Effective implementation of company strategies depends on managers’ command
More Decentralization is advisable when:
Lower-level managers are talented and knowledgeable at making decisions.
Lower-level managers are willing to be part of decision making
Company is geographically spread.
Effective implementation of the company requires the involvement of lower-level managers also.


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