A corporation’s annual report and consolidated accounts, for example, are required by law and must be signed by the CEO, so it is impossible to delegate this task to the business divisions. Decentralisation can be viewed as an extension of delegation. In this case, the answer is yes to centralization. Centralization – Meaning, Advantages and Disadvantages Centralization of Authority In any business organization, concentration of authority and powers in the hands of top management is referred to as centralization, everything which goes to reduce the importance of subordinates role in an organization is known as centralization. Briefly examine the merits and demerits of different types of organisation that are found in modern enterprises PreserveArticles.com is an online article publishing site that helps you to submit your knowledge so that it … Learn vocabulary, terms, and more with flashcards, games, and other study tools. Conversely, in a decentralized state, power and responsibilities are dispersed and distributed across regions and areas. Decentralization often comes into picture to tackle the disadvantages of centralization. When a part of the work is entrusted to others, it is known as delegation. Advantages of decentralization include better, more timely decisions and increased motivation. Under certain conditions a centralized organizational structure can be advantageous. Centralization offers four major advantages: lowered costs, improved productivity, decreased regulatory costs and an overall greater degree in flexibility and agility. In a centralized organization structure, the centralized authority may have a better perspective on the big picture of the organization and how the subunits of the organization fit together … The Disadvantages of Decentralization. Some of the disadvantages of centralization is the resources are concentrated to the center and do not reach the grassroots, it leads to delay of work, and has no secrecy or loyalty. It alludes to the concentration of all the powers at the apex level. Although a decentralized command structure does help to overcome the cons of autocratic management such as lack of ownership and authority, as you go down the hierarchical organization structure, it has its own unique set of pros and cons. What is decentralization and explain its advantages and disadvantages ? Centralization of authority means the power of planning and decision making are exclusively in the hands of top management. The disadvantages of decentralization are when a certain organization has already expanded, decentralization is not needed anymore. The first step is to ask whether the company has a choice. Start studying Advantages vs. Decentralisation: Meaning, Advantages and Disadvantages of Decentralisation! Disadvantages of Decentralization. In a centralized state, the power and the authority are concentrated in the hands of the central government, which takes decisions and performs most functions.

Inexperience Is A Problem One of the biggest issues when dealing with a decentralized business is sheer inexperience. Centralization and Decentralization are the two types of structures, that can be found in the organization, government, management and even in purchasing. 1. If employees are not trained and experienced in the types of things that they will be responsible for, then the business is greatly harmed. The terms centralization and decentralization refer to the political and administrative structure of a country. A centralized management structure places authority over the organization as a whole in a small group of top-level managers.

See Also: Organizational Structure Advantages of Decentralization. Decentralisation extends to the lowest level of the organisation.

Advantages and Disadvantages of Centralization. It can also result in inadequate control and appraisal.

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