Centralization and Decentralization

Centralization
Higher lever directly control all function of a company
The process of transferring and assigning decision-making authority to higher levels of an
organizational hierarchy.

Used in small organization

FACTOR

Achieving uniformity

Promoting leadership

Handing emergency

ADVANTAGE DIS ADVANTAGE

Standantized of procedure Distaory person development
Less expensive Over burden on high level mang.
Coordination No scope of specialization
Decentralization
• Definition: The process of transferring and assigning decision-making authority to lower
levels of an organizational hierarchy.

, the decision-making has been moved to lower levels or tiers of the organization, such as
divisions, branches, departments or subsidiaries..

Knowledge, information and ideas are flowing from the bottom to the top of the organization

control of top managers is relatively small

Degree of Decentralization

No of decision

Effect of decision

Importance of decision

Checking of decision

ADVANTAGE DIS ADVANTAGE

Reduce burdun on top mang. Lack of coordination
Division of risk Costly
Quick decision Lack of able manager
Motivatin