ITFT - PRINCIPALS OF MANAGEMENT

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Centerlization & Decenterlization

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ITFT - PRINCIPALS OF MANAGEMENT

  1. 1. Centralization & De-centralization
  2. 2. CENTRALIZED Top Managers Hold Most Decision Making Authority DECENTRALIZED Lower Level Managers Hold Significant Decision Making Authority
  3. 3. CENTRALIZATION The amount of authority and autonomy given to a multinational divisional manager. In short, the simple meaning is that the location of most authority at the upper levels of the organization, it’s called centralization.
  4. 4. Some times you would face this situation in many companies that if you have ever called a company’s with a complaint or a special request and been told by the customer service representative ,’’ I will have to ask my manager” or “ I am not authorized to do it but I understood your situation yet I can not do it.” so you are aware about such type situation’s answer.
  5. 5. Therefore, in this type of organization managers take most decisions even the small one also, that why the customer service representative you called couldn’t make a decision without first asking the manager. so, in a centralized organization, head officer will retain the major responsibility and power. Headquarter Production Marketing Finance Personal
  6. 6. For an example, reserve bank of India takes every decision, about C.R.R. (cash reserve ratio) , inflation rate, printing money, interest rate etc.
  7. 7. Advantages of Centralization Better co-ordination Focus on the most important decision  Improved quality of work Flexibility Personal leadership Uniformity in action Reduced cost
  8. 8. Thus, decreasing role of subordinates in decision making is calling centralization.
  9. 9. Delay in work Remote control No faithfulness No secrecy No special attention Politics
  10. 10. Centralization organization we can see that Adolf Hitler & Benito Mussolini leadership, all people against his leadership and result is that they were lost, so in centralization, decision will be taken by one person & it may be correct or wrong, therefore centralization is not good for organization.
  11. 11. Increasing the role of subordinates in decision making is decentralization & simple meaning is that the location of a significant amount of authority in the lover levels of the organization. Decentralization
  12. 12. A organization is decentralization, if it has a high degree of delegation at all levels you may have talked to customer service representative at call center who said “I can take care of that for you right now.” It’s mean a person was able to handle your problem without any input from or consultation with company ‘s management
  13. 13. In this organization workers closest to problems are authorized to take the necessary decision to solve the problems on their own the best way to develop and retain a close relationship with the customer . Customer care
  14. 14. How to be a more effective decentralization 1. Trust your staff 2. Avoid seeking perfection 3. Instruction 4. Know your interest 5. To help identify potential problems 6. Praise the effort of your staff 7. Routinely decentralization work 8. Provide resources 9. delegate to the lowest possible level.
  15. 15. Advantages Reducing senior manager’s burden Increased motivation Maintenance of Secrecy Quick decision Local knowledge Proximity to the market  As manager in many organization consider greater decentralization  The important question is not whether an organization should be decentralized but to what extent to it should be decentralized.
  16. 16.  Expensive  Lack of Uniformity  Difficulty in Co-ordination  lack of specialization  Hard to make decisions as a whole Disadvantages
  17. 17. DIRECTOR FINANCE MANAGER MARKETING MANAGER PRODUCTION MANAGER PERSONNEL MANAGER 1 2 3 4

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