The document discusses centralization and decentralization in organizational structure. It provides examples of each and lists their advantages and disadvantages. Centralization involves authority being concentrated at the top level, while decentralization involves dispersing authority throughout different levels of management. A trucking company is given as an example of centralization, while a fast food franchise is provided as an example of decentralization. Some key advantages and disadvantages of each approach are also outlined.

1. PRESENTED TO:
MS. POOJA PURI
PRESENTED BY:
SWATI JAIN
TANIA
TARANPREET KAUR
MOHMAD YOUNIS
TANTRAY
CLASS : MBA-I Semester

3. CENTRALIZATION
Centralization means reservation of authority at
central point within the organization.
In centralization, control and decision making reside
at the top level of management.
“Everything that goes to increase the importance of
the subordinate’s role is decentralization;
everything that goes to reduce it is centralization.”
—Henry Fayol

4. EXECUTIVE
DIRECTOR
FINANCE
MANAGER
OPERATION
MANAGER
FINANCE
EXECUTIVE
ADMIN.
OFFICER
SENIOR
MANAGER
ASST.
MANAGER

5. EXAMPLE OF CENTRALIZATION
A TRUCKING COMPANY IS AN EXAMPLE OF A COMPANY
WITH A CENTRALIZED ORGANIZATIONAL DESIGN.
TRUCKING COMPANY MANAGERS MAKE ALL OPERATIONAL
DECISIONS, SENDING INFORMATION TO INDIVIDUAL
DRIVERS THROUGH DISPATCHERS.

6. ADVANTAGES
1. Reduced cost : the standardized procedure and
method helps in considerably reduction of
management cost.
2. Uniformity in action: uniformity in action is
established throughout the organization because of
central administrative control.
3. Facility: centralization permits flexibility and
adaptability of the organization to the changed
circumstances.
4. Improved quality of work: Improved quality of
management is possible because of standardized
procedure and better supervision.

7. 5. Availability of information: For centralizing of an
information institution one can get all necessary
information from a specific please.
6. Make a good relationship: By centralizing of an
information institution users can meet to each other.
Thus they can make a good relation.

8. DISADVANTAGES
1. Delay in information management: Centralization
creates loss of man-hours and delay in information
management. Quick decision is not possible which
also results delay in information management
process...
2.Remot control: Staff of the information institute are
always kept under the control of the authority.
3.No loyalty: In centralization management process
there is no subordinate’s initiative in work.

9. 4.No special attention: In centralization no special
attention is given to special work as all works are
done at one place.
5.Frustration:Centralization leads to frustration
because of too rigid central control.
6. Expectation: Many poor users can not be able to
read their expected books.
7.Interest: Many users lose their interest in reading
books because of they have to come the specific
place first then they can collect their information.

11. DECENTRALIZATION
Decentralization is a systematic delegation of authority
throughout the levels of management , in an organization.
In decentralized organization, lower level managers can also
take decisions.
In the words of Henry Fayol ,” Everything that goes to increase
the importance of the subordinate's role is Decentralization.”

12.  Knowledge ,Ideas and information are flowing from the
bottom to the top level of organization.
Decentralized Approach
Bottom to
top
approach
Levels of
organization

13. EXAMPLE OF DECENTRALIZATION
 Fast food franchise chain is an ideal example of
decentralized organization.
 In franchise based organization, the product development
and marketing decisions are controlled by the top level.
But they give franchise owners great deal of
independence in running their individual store.
 McDonalds is the world’s largest fast food chain.

14. ADVANTAGES OF DECENTRALIZATION
1) QUICK AND WISE DECISION POSSIBLE
As decision making powers are reside at all levels of
management, the authority at each level can make reasonably
Accurate, wiser and timely decision.
2) REDUCES THE BURDEN OF TOP MANAGERS
It free the top managers from the burden of taking too many
operating decisions.
3) IMPROVES MOTIVATION
Decentralization provides more chances for the subordinates to
exercise initiative without any interference from the superior.
This improves the morale of the employees and motivate
them for peak performance.

15. 4) DEVELOPMENT OF THE MANAGERIAL
PERSONNEL
As the business grows in size, it requires the services
of large number of managers and here
decentralization provides a training ground for the
would be managers.
5) ENSURE EFFECTIVE CONTROL
It is easy to measure the performance of the
operations at the department level. This will lead to
effective control.

16. DISADVANTAGES OF DECENTRALIZATION
1. Uniform policies not Followed:
Under decentralisation, it is not possible* to follow uniform
policies and standardised procedures. Each manager will work and
frame policies according to his talent.
2. Problem of Co-Ordination:
Decentralisation of authority creates problems of co-ordination as
authority lies dispersed widely throughout the organisation.
3. More Financial Burden:
Decentralisation requires the employment of trained
personnel to accept authority, it involves more financial
burden and a small enterprise cannot afford to appoint
experts in various fields.

17. 4. Require Qualified Personnel:
Decentralisation becomes useless when there are no
qualified and competent personnel.
5. Conflict:
Decentralisation puts more pressure on divisional
heads to realize profits at any cost. Often in meeting their
new profit plans, bring conflicts among managers.

18. BASIS CENTRALIZATION DECENTRALIZATION
1.MEANING The retention of powers and
authority with respect to planning
and decisions, with the top
management, is known as
centralization.
The dissemination of authority,
responsibility and accountability to
the various management levels, is
known as decentralization.
2. INVOLVES Systematic and consistent
reservation of authority.
Systematic dispersal of authority.
3.COMMUNICA
TION FLOW
vertical Open and free
4.DECISION
MAKING
slow Comparatively faster
5.ADVANTAGE Proper coordination and
leadership
Sharing of burden and
responsibility
6.POWER OF
DECISION
MAKING
Lies with the top management Multiple persons have the power
of decision making
7.REASONS Inadequate control over the
organization
Considerable control over the
organization
8.BEST SUITED
FOR
Small sized organization Large sized organization

19. CONCLUSION
In ancient times, people used to run their
organization in a centralized manner, but now the
scenario has been changed completely due to rise in
the competition where quick decision making is
required and therefore many organizations opted for
decentralizations.
At present, most of the organizations are equipped
with both the features. Complete centralization in an
organizations not practicable because it represents
that each and every single decision of the
organization is taken by the top echelon. On the other
hand, decentralization is an indicator of no control
over the activities of subordinates. So, a balance
between these two should be maintained.

20. CASE STUDY ON
DECENTRALISATION AS A
TOOL FOR EFFECTIVE
FRIENDLY SERVICE
DELIVERY

21. INTRODUCTION
The paper is divided into six parts:
1. Introduction
2. The Background
3. Challenges
4. Strategies
5. Outcomes
6. Conclusion

22.  This case study focuses on the use of
decentralization in achieving effective
service delivery at the Lagos State Local
Government PensionsBoard.
 The strategy led to elimination of fatality
among the very old pensioners
 Reduced sharp practices from those
exploiting the rowdiness of the centralised
verification exercise to perpetuate fraud
 Hence achievement of more
accurate data base for payment of
monthlypensions.

23. BACKGROUND
 Decentralization in the Public Service
has always been a subject of
controversy
 While the proponents have stressed the
positive benefits of ensuring efficient
service delivery at the grassroots
 The opponents have argued that the
level of institutional development at the
grassroots will make decentralization a
disaster if the capacity for management at
this level is lacking the possibility of
mismanagement of such additional
responsibilities isvery high

24.  In a paper titled “The Impact of Decentralization in Service
Delivery, Corruption, Fiscal Management and Growth in
Developing and Emerging Market Economies: A Synthesis of
Empirical Evidence by Anwar Shah, Theresa Thompson
and Zeng- Fu
Zou, observed myriad of outcomes as a result of
implementation of decentralization in many developing
countries.
 Insome cases the study revealed negative impact with
high perceived corruption and poor service delivery. In
some cases the impacts were inconclusive as the local
officials may have good understanding of local needs
but their responses were inadequate because of
procedural, financing and governance constraints.
 There were also many empirical cases of
decentralization with positive impacts leading to
increase in transparency, reduction in corruption and
successful provision of services that addressed local
needs.

25. ❑ In theory, decentralization is expected to ensure
responsiveness accountability, efficiency and equity.
However absence of:
❑ Effective Coordination and Capacity to deliver service
Stakeholders understanding and support could negate the
positive expectations from decentralization.
❑ As part of the Public Sector Reforms carried out in Nigeria
between 1999 and 2003, a new Pensions Scheme- the
Contributory Pension Scheme (Funded by the Government
and Contributions by Staff) was introduced.
❑ The old Pensions Scheme (Funded by the Government) is
expected to continue to decrease until the last beneficiary
dies. To ensure accurate data base of Alive Pensioners, there
is annual ‘I am Alive’ Verification Exercise

26. CHALLENGES
❑ Prior to the 2013 “I am Alive Exercise” the verification
exercise was carried out at one location for the over
10000 Pensioners
❑ The exercise was always rowdy
❑ Cases of fatalities recorded
❑ Fraudulent individuals capitalised on the rowdiness to
smuggle fake names into the list of cleared pensioners
❑ Overloaded monthly pensioners payment by the board
❑ The amount released by state government for the
Verification Exercise had been decreasing yearly
❑ The management was thus faced with the challenge t
decentralise to address the rowdiness created b
centralization and to find innovative ways to achieve bette
result in the face of dwindling resources

27. STRATEGIES DEPLOYED TO SOLVE
THE PROBLEM
 A stakeholders meeting was held where
agreement was reached to decentralise the
exercise in to 12 out of the 57 Local Governments
 A total of twelve screening panels were constituted
excluding staff of the Pensions Board including
representatives of the Pensioners Union for the group
of Local Government Councils at each venue
 Since the venue were spread throughout the state, the
places of abode of members were taking into
consideration in determining their placement on
panels to reduce transport allowance and avoid
payment of accommodation allowance

28.  To implement this change within available budget, the
Council Managers (now Heads of Administration) in the selected
Local Governments were contacted and they provided
canopies, chairs, medical staff and first aid facilities and
conveniences
 The lists of Pensioners for each of the 12 venues were prepared
 Each List was dividedinto 8 groups
 Each group was assigned a day to appear for the verification
 The last two days of the 10-day exercise were reserved for
complaints and those who missed assigned dates
 A one-day training programme was conducted for the
panelists and selected staff of the relevant Local Government
used as venue to ensure smooth verification exercise

29. OUTCOMES
 As a result of the strategies deployed, the exercise recorded
no casualty that year.
 The screening time per Pensioner was reduced in most cases
to 5 minutes.
 The monthly pensioners pay was reduced from average of
N210, 000,000 to N184, 000,000 monthly.
 The travel distance to the venue was also reduced
considerably to less than 2 kilometers.
 At the end of the exercise not all the funds released to
augment the fund provided by the state government for the
exercise were utillised.
 Finally, the Union of Pensioners wrote a letter to
commend management for organizing the most
effective Verification in the history of the Exercise.

30.  Decentralization can be deployed for delivery of
customer friendly service isdecentralization if carefully
managed
 Through careful coordination of efforts, enlistment of
stakeholders support, building the capacity of
grassroots officials through joint implementation of
service delivery with experienced state officials and
training
 It can be deployed to bring service closer to the
grassroots.
 Public Servants should as much as possible review
and evaluate modus operandi to accommodate
changes that will improve impact of their service
delivery.
CONCLUSION

31. THANK YOU