The document outlines two types of organizational structures: centralized and decentralized. Centralized organizations retain decision-making authority with top management, while decentralized organizations empower lower-level managers with decision-making responsibilities. It discusses the forces and reasons for both centralization and decentralization, including factors like organizational crisis, management control desires, and the need for professional manager development.

1. by: Gem Burneth Lacambra

2. There are two types of
organizational structures:

3. Centralized Organization
-is a structure where the top
management, i.e. company executives,
controls most activities and makes most
decisions regarding the company's
activities.
-the authority to make important decision
is retained by top level managers

4. Decentralized Organization
-a high degree of autonomy is given to lower
levels of management. In this set-up, managers
of sub-units are granted the power to decide on
matters within their areas of responsibility.
-the authority to make important decisions is
delegated to managers at all levels in the
heirarchy

5. Forces for Centralization
• Organizational Crisis
• Management desire for control
• Increase Consistency ,reduce costs

6. Forces for Decentralization
• Complexity -size, diversity
• Desire for empowerment

7. Reasons for Centralization
• Organizational Crisis
• Management desire for control
• Increase Consistency ,reduce costs

8. Reason for Decentralization
• It encourages the development of
professional manager.
• Managers are able to exercise more
autonomy but it can lead to competetive
climate.