Centralization and

Decentralization
 “CENTRALISATION is the sysytematic and
consistent reservation of authority at
central points within the organisation”
Benefits
 Top management can take vital decisions
affecting the entire organization
 Having a uniform policy and coordination of
all activities are possible
 Higher level people in the organization can
take more effective and intelligent decisions
 Crisis and emergency decisions can be
effectively managed
 Control and communication become easier
Limitations
 Decision are not taken by people who face
situations and problems in their area
 Lower and middle level management will not
have interest and initiative in the job
 Top management unnecessarily has to waste
a lot of time and energy on unimportant and
routine matters
Decentralization
 Decentralization is the systematic and
consistent delegation of authority to the
levels where the work is performed
Benefits

 Relieves top management of the burden of

decision making and forces upper level
managers to participate effectively
 Encourages decision making and assumption
of authority and responsibility
 Gives managers more freedom and
independence in decision mak9ing
 Aids in adaptation to a fast changing
environment
Limitations
 May result in loss of some control by upper
level managers
 Can be limited by the availability of qualified
managers
 Involves considerable expense for training
managers
Span of management

 “how many subordinates can be effectively

managed by a manager”
Factors determining the Span of
management
 Qualities and abilities of the executives
 Nature and sigificance of the tasks
 Capacity and quality of subordinates
 Levels of management
 Clarity, precision and perfection of plans and
responsibility
 The degree of decentralization
Line and Staff
 Line managers have the power and authority
for taking decisions and also performing their
duties
 Staff function is to advise or support or assist
line managers
The Line viewpoint
 Line manages feel that staff do not have any
responsibility but only enjoy authority
 LM feel that the staff encroach their authority
 Lime managers authority is diluted as a result
of encroachment by the staff
 Staff fails to give sound advice
 Staff gets the credit when the goals are
achieved but are not responsible for the
failures
The staff viewpoint
 The staff always fee that the line authority
command them for support services
 Line managers usually resist new ideas given
by the staff
 Staff also feels that they do not get enough
from the line managers
Reducing conflicts between line and
staff
 The line and staff should understand their
proper positions and functions in the
organization.
 The line should be educated and encouraged
to use the staff effectively
 The staff should render complete advice on
the problems concerned