• “Centralization” is the systematic and consistent reservation of authority at central points in the organization.• The implication of centralization can be :- Reservation of decision making power at top level. Reservation of operating authority with the middle level managers. Reservation of operation at lower level at the directions of the top level.
Different Kinds of Centralization• Centralization of performance• Departmental centralization• Centralization of management
• Decentralization is a systematic delegation of authority at all levels of management and in all of the organization.• “Everything that increasing the role of subordinates is decentralization and that decreases the role is centralization”• Authority in retained by the top management for taking major decisions.• Decentralization pattern is wider is scope.
Implication of Decentralization• Less burden on the Chief Executive as in the case of centralization.• Subordinates get a chance to decide and act independently.• Operations can be coordinated at divisional level.• Co-ordination to some extent is difficult to maintain.
Advantage of Centralized Organizational Structure• Focused Vision• Fast Execution• Reduced Conflict• Control and Accountability
Advantage of Decentralized Organizational Structure• Empowering Employees• Relieving the Burden• Preparing for Emergencies• More Efficient Decision-Making• Ease of Expansion