Difference Between Centralization and Decentralization

Centralization in an organization involves decision-making capability in the hands of top management. It implies that all power, authority is upheld at the topmost level. Decentralization in an organization involves decision-making capability through middle management or lower management.

What is the difference between centralized and decentralized?

In centralized organizations, primary decisions are made by the person or persons at the top of the organization. Decentralized organizations delegate decision-making authority throughout the organization.

What is centralization and decentralization?

INTRODUCTION. The term centralization means concentration of authority at the top of the administrative system. On the one hand, and, on the other hand, decentralization means dispersal of authority among the lower levels of the administrative system.

What is an example of decentralization?

An example of a decentralized organization is a fast-food franchise chain. Each franchised restaurant in the chain is responsible for its own operation. Broadly speaking, companies start out as centralized organizations and then progress towards decentralization as they mature.

What are the advantages of decentralization?

Advantages and Disadvantages Of Decentralisation

• Motivation of Subordinates. ...
• Growth and Diversification. ...
• Quick Decision Making. ...
• Efficient Communication. ...
• Ease of Expansion. ...
• Better Supervision And Control. ...
• Satisfaction of Human needs. ...
• Relief to top executives.

What is the concept of decentralization?

Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.

What do you mean by decentralization?

In its most general term, decentralization refers to the transfer of authority from a central government to a sub-national entity. ... There are many ways in which a government may devolve power to the sub-national level. Thus, decentralization can be political, administrative, fiscal, or economic.

Which is an example of centralized control?

McDonald's is a prime example of centralized management and standardization. The exact same number of pickles is put on each burger no matter where you are in the world. Airlines do this too – you will get the exact same brand of bottled water on every airplane in the same brand.

What are the main features of decentralization?

Advantages of Decentralisation:

• Reduces the burden on top executives: ...
• Facilitates diversification: ...
• To provide product and market emphasis: ...
• Executive Development: ...
• It promotes motivation: ...
• Better control and supervision: ...
• Quick Decision-Making: ...
• Uniform policies not Followed:

What are the types of decentralization?

Administrative decentralization has three major forms—deconcentration, delegation, and devolution—each with different characteristics.

What are the characteristics of decentralization?

Following are the salient characteristics of decentralisation: (i) It is an expanded version of delegation of authority. (ii) It increases the significance of the role of subordinates. (iii) It is a process which is applicable to the organisation as a whole.

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