The document discusses the concepts of centralization and decentralization of authority as described by Henri Fayol, an influential figure in management theory. Centralization involves retaining decision-making power at higher management levels, while decentralization delegates authority throughout all levels of an organization. Advantages and disadvantages of both structures are outlined, along with factors influencing the decision to centralize or decentralize authority.

1. CENTRALIZATION AND
DECENTRALIZATION OF
AUTHORITY
PRESENTED BY:
SID G

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. “Centralization” is the systematic and
consistent reservation of authority at
central points in the organization.

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. “Decentralization” is a systematic
delegation of authority at all levels of
management and in all of the
organization.

6. DECENTRALIZATION

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. Advantage of Centralized
Organizational Structure
• Reduced cost
• Uniformity in action
• Personal leadership
• Flexibility
• Improved quality of work
• Better co-ordination

10. Dis Advantage of Centralized
Organizational Structure
• Delay in work
• Remote control
• No loyalty
• No Secrecy
• No special attention

11. 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

12. 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

13. 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

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

15. 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

16. THANK YOU