Centralization and Decentralization
In this Article, Present What are Centralization and Decentralization in Organization Management.
Centralization: Meaning and Definition
The Centralization is the reservation or withholding of authority by individual managers within the organization.
“Centralization is the Systematic and consistent reservation of authority at Central point within the organization” – Louis Alien
Thus, in centralization, the little delegation of authority is the rule. which means that power and discretion are concentrated in Few executives. Control and decision making is withheld and reside at the top level of management.
The Centralization may be Essential and Practicable for small organizations to survive in a highly competitive world. but as the organization grows more Complex in terms of its increasing size, The interdependence of work-inflow-completeness of tasks and Spatial physical Barriers within and among Groups. It is necessary that decision-making Centre should be moved to operating level for achieving Efficiency.
Thus, the largest the size of an organization, the more urgent is the need for decentralization.
However, this does not mean that centralization is bad and decentralization is good.
Decentralization: Meaning and Definition
Decentralisation means consultant delegation of authority throughout the organization. it is pushing down of authority and power a decision making to the lower levels of the organization. The centers of decision making are dispersed throughout the organization. the Essence of decentralization is the transference of authority from a higher level to a low level.
Some important definitions of decentralization are reproduced as follows:
The Decentralization is the tendency to disperse decision making authority in an organized structure. – Weihrich and Koontz
The Decentralization is the tendency of dispatch decision making authority in an organization structure. – A.H. Hanson
Distinction between delegation and decentralization
All Though decentralization is closely related to the delegation the following are some points of difference between the two concepts:
- Delegation refers to the transfer of authority from one individual to another, while decentralization refers to the systematic delegation of authority to all units in an organization widely. It means that the decentralization is consistent and wide dispersal of authority throughout the organization.
- The Delegation Can take place from one person to another and be a complete process. However, decentralization is complete only when the fullest possible delegation is made to all or most of the people up to the lower level in the organization.
- delegation is between a superior and a subordinate, while decentralization is organisation-wise delegation as between top management and departments of divisions.
- delegation is necessary for effective management because no individual manager can afford to look after everything. However, decentralization is optionally necessitated by the growth of the organization.
Thus, You are here What are Centralization and Decentralization in Organization Management.