CENTRALIZATION AND DECENTRALIZATION
It is the process of transferring and assigning decision-making authority to higher levels of an organizational hierarchy. The span of control of top managers is relatively broad, and there are relatively many tiers in the organization.
Philosophy / emphasis on: top-down control, leadership, vision, strategy.
Decision-making: strong, authoritarian, visionary, charismatic.
Organizational change: shaped by top, vision of leader.
Execution: decisive, fast, coordinated. Able to respond quickly to major issues and changes.
Uniformity. Low risk of dissent or conflicts between parts of the organization.
Advantages of Centralization
Provide Power and prestige for manager
Promote uniformity of policies, practices and decisions
Minimal extensive controlling procedures and practices
Minimize duplication of function
Disadvantages of Centralization
Neglected functions for mid. Level, and less motivated beside personnel.
Nursing supervisor functions as a link officer between nursing director and first-line management.
It is the process of transferring and assigning decision-making authority to lower levels of an organizational hierarchy. The span of control of top managers is relatively small, and there are relatively few tears in the organization, because there is more autonomy in the lower ranks.
Philosophy / emphasis on: bottom-up, political, cultural and learning dynamics.
Decision-making: democratic, participative, detailed.
Organizational change: emerging from interactions, organizational dynamics.
Execution: evolutionary, emergent. Flexible to adapt to minor issues and changes.
Participation, accountability. Low risk of not-invented-here behavior.
Three Forms of decentralization
De-concentration. The weakest form of decentralization. Decision making authority is redistributed to lower or regional levels of the same central organization.
Delegation. A more extensive form of decentralization. Through delegation the responsibility for decision-making are transferred to semi-autonomous organizations not wholly controlled by the central organization, but ultimately accountable to it.
Devolution. A third type of decentralization is devolution. The authority for decision-making is transferred completely to autonomous organizational units.
Advantages of Decentralization
Raise morale and promote interpersonal relationships
Relieve from the daily administration
Bring decision-making close to action
Develop Second-line managers
Promote employee’s enthusiasm and coordination
Facilitate actions by lower-level managers
Disadvantages of Decentralization
Top-level administration may feel it would decrease their status
Managers may not permit full and maximum utilization of highly qualified personnel
Increased costs. It requires more managers and large staff
It may lead to overlapping and duplication of effort
Centralization and Decentralization are two opposite ways to transfer decision-making power and to change the organizational structure of organizations accordingly.
There must be a good balance between centralization and decentralization of authority and power. Extreme centralization and decentralization must be avoided.