Centralization and decentralization of authority

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Centralization and decentralization of authority

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  • One of the 14 principals of henry fayol. Diffrence,
  • Centralization and decentralization of authority

    1. 1. CENTRALIZATION AND’ DECENTRALIZATION OF AUTHORITY
    2. 2. • Henri Fayol (was a French mining engineer and director of mines who developed a general theory of business administration. • He and his colleagues developed this theory independently of scientific management but roughly contemporaneously. • He was one of the most influential contributors to modern concepts of management. • Fayol has introduced the 14th principles of management which are very dynamic in nature. • Among those the 8th principle is CENTRALIZATION AND DECENRALIZATION. INTRODUCTION
    3. 3. “Centralization” is the systematic and consistent reservation of authority at central points in the organization.
    4. 4. • 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.
    5. 5. “Decentralization” is a systematic delegation of authority at all levels of management and in all of the organization.
    6. 6. DECENTRALIZATION
    7. 7. • “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.
    8. 8. Advantage of Centralized Organizational Structure • Reduced cost • Uniformity in action • Personal leadership • Flexibility • Improved quality of work • Better co-ordination
    9. 9. Dis Advantage of Centralized Organizational Structure • Delay in work • Remote control • No loyalty • No Secrecy • No special attention
    10. 10. Advantage of De Centralized Organizational Structure • Distribution of burden of top executive • Increased motivation and morale • Greater efficiency and output • Diversification of Activities • Better Co-ordination • Maintenance of Secrecy • Facilitate effective control and quick decision
    11. 11. Dis Advantage of De Centralized Organizational Structure • More cost • No specialization • Need more specialists • No uniform action • No equitable distribution of work • Control Systems • Types of Business • Branches of organization • Type of organization
    12. 12. WHAT ARE THE FACTORS INFLUENCING CENTRALIZATION? • Size and dispersal of operation • Level of diversity of product-lines • Nature of growth • Nature of Business • Quality of Executives • Management by Exception • Effective Control System
    13. 13. WHAT ARE THE FACTORS AFFECTING DECENTRALIZATION? • Size of the organization – large or small • Cost and Importance of decisions • Uniformity • History of organization • Management Philosophy • Availability of efficient managers • Type of business • Branches of organisation
    14. 14. WHAT ARE THE FACTORS AFFECTING DECENTRALIZATION? • Size of the organization – large or small • Cost and Importance of decisions • Uniformity • History of organization • Management Philosophy • Availability of efficient managers • Type of business • Branches of organisation

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