Chapter: 12th Office Management and Secretaryship : Chapter 6 : Delegation of Authority
Meaning of Centralization and Decentralization
Meaning of Centralization and
Decentralization
Centralization
refers to the degree to which decision-making process is concentrated at a
single point in the organization. If top management makes all the important
decisions in the organization with little or no input from the lower level
employees, then the organization is said to be a highly centralized
organization. In contrast, if the organization encourages lower level personnel
to participate in the decision making process and allows a greater amount of
discretion, the organization is called a decentralized organization.
It is however,
to be noted that the concept of centralization - decentralization is relative
and not an absolute one. No organization can be labeled as totally centralized
or decentralized. It can perhaps be best understood if we consider that an
organization may lie along a continuum with centralization at one end and
decentralization at the other extreme. Thus, an organization may be relatively
centralized or decentralized in its ways of functioning and operations. The
table below summarizes the factors determining the amount of
centralization-decentralization of an organization.
Factors determining the amount of centralisation – decentralisation
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