Centralization & decentralization
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Centralization & decentralization

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Centralization & decentralization Centralization & decentralization Presentation Transcript

  • DECENTRALIZATION & CENTRALIZATION
  • DECENTRALIZATION
    • Everything that goes to increase the importance of the subordinates’ is decentralization and everything which goes to reduce it is centralization.
    • - Henry Fayol
  • CHARACTERICS OF DECENTRALIZATION
    • Extended form of delegation
    • Gives importance to the role of subordinates
    • Process applicable to entire organization
    • Reduces the work-load of the managers in the top hierarchy
    • Decisions are taken by those employees who implement them.
    • Under it along with authority, responsibility is also transferred.
  • Principles or Factors making decentralization more effective :
    • Principle of Good Delegation
    • Principle of Proper Communication
    • Principal of Adequate Control
    • Principle of Centralized Decentralization
    • Principle of Proper Motivation
    • Principle of Minimum Interference
  • Advantages of decentralization
    • Relieves the Top Executives of Excessive Workload.
    • Managerial Development
    • Increase in morale of employees
    • Quicker and better decisions
    • Improvement in Industrial Relations
    • Expansion of Market
    • Increase in Initiative
    • Reduces problem of Communication
  • Disadvantages of decentralization
    • Dependence on the ability of subordinates
    • Lack of cooperation
    • Lack of uniformity of decision
    • Costly set- up
    • Lack of control
  • CENTRALIZATION
    • Centralization is the systematic and consistent reservation of authority at central points in the organization.
    • - Louis A. Allen
  • Characteristics of Centralization
    • Almost all the authority to take decision is kept reserved at the top level.
    • Role of subordinates is to implement decisions.
    • Process of delegation of authority is used to the minimum.
    • Distance between the place of work and the place where decisions are taken.
  • Advantages of Centralization
    • Independent set-up
    • More Coordination
    • Uniformity of decisions
    • Cheap set-up
    • Advantages of Expert’s Services
    • More control
  • Disadvantages of Centralization
    • Excessive work load for top executives
    • Diversification impossible
    • Decrease in the Morale of Employees
    • Delay in decisions
    • Industrial Disputes
    • Decrease in Initiative
    • Expansion of Market Impossible
    • Problem of Communication
  • Factors Affecting the degree of Centralization & Decentralization
    • Size of the organization
    • Managerial Outlook
    • History of the organization
    • Availability of competent subordinates
    • Control Technique
    • Riskiness of Decisions
    • Extent of Diversification
    • Government Interference
  • Delegation Vs. Decentralization
    • Transfer of Accountability
    • Control
    • Compulsion
    • Permanency in Transfer of Authorities
    • Scope
    • Relations b/w Delegator & Delegant
    • Deliberate Policy
    • Dependence
  • Centralization Vs. Decentralization
    • Delegation of Authority
    • Quickness of Decisions
    • Dependence
    • Uniformity of Decisions
    • Cooperation
    • Work-load of Executives
    • Development of Employees
    • Industrial Disputes
    • Suitability
    • Expansion of Market