This document discusses centralization and decentralization in organizations. [1] Centralization refers to authority being concentrated at higher levels, while decentralization distributes authority to lower levels. [2] Centralization allows for better coordination but can slow decisions, while decentralization empowers local managers but reduces uniformity. [3] Most organizations balance these approaches - decentralizing routine tasks but centralizing major strategic decisions.

1. Centralization &
De-centralization
Prepared by:
Jay Raval

2. CENTRALIZED
Top Managers Hold Most Decision
Making Authority
DECENTRALIZED
Lower Level Managers Hold
Significant Decision Making Authority

3. CENTRALIZATION
 The amount of authority and autonomy given to a
multinational divisional manager.
 In short, the simple meaning is that the location of most
authority at the upper levels of the organization, it’s called
centralization.

4. Some times you would face this situation in many companies that
if you have ever called a company’s with a complaint or a special request
and been told by the customer service representative ,’’ I will have to ask
my manager” or “ I am not authorized to do it but I understood your
situation yet I can not do it.”
so you are aware about such type situation’s answer.

5. Headquarter
Production Marketing Finance Personal
Therefore, in this type of organization managers
take most decisions even the small one also, that why
the customer service representative you called couldn‟t
make a decision without first asking the manager.
so, in a centralized organization, head officer
will retain the major responsibility and power.

6. For an example, reserve bank of India
takes every decision, about C.R.R. (cash reserve
ratio) , inflation rate, printing money, interest
rate etc.

7. Advantages of Centralization
 Better co-ordination
 Focus on the most
important decision
 Improved quality of work
 Flexibility
 Personal leadership
 Uniformity in action
 Reduced cost

8. Thus, decreasing role of subordinates in
decision making is calling centralization.

9.  Delay in work
 Remote control
 No faithfulness
 No secrecy
 No special attention
 Politics

10.  Centralization organization we can see that Adolf
Hitler & Benito Mussolini leadership, all people
against his leadership and result is that they were
lost, so in centralization, decision will be taken by
one person & it may be correct or
wrong, therefore centralization is not good for
organization.

11. Decentralization
Increasing the role of subordinates in
decision making is decentralization &
simple meaning is that the location of a
significant amount of authority in the
lover levels of the organization.

12. A organization is decentralization, if it has a high
degree of delegation at all levels
 you may have talked to customer service representative
at call center who said “I can take care of that for you
right now.”
 It‟s mean a person was able to handle your problem
without any input from or consultation with company „s
management

13. Customer care
 In this organization workers closest to problems
are authorized to take the necessary decision to
solve the problems on their own the best way to
develop and retain a close relationship with the
customer .

14. How to be a more effective decentralization
1. Trust your staff
2. Avoid seeking perfection
3. Instruction
4. Know your interest
5. To help identify potential
problems
6. Praise the effort of your
staff
7. Routinely
decentralization work
8. Provide resources
9. delegate to the lowest
possible level.

15. Advantages
 Reducing senior manager’s burden
 Increased motivation
 Maintenance of Secrecy
 Quick decision
 Local knowledge
 Proximity to the market
 As manager in many organization consider
greater decentralization
 The important question is not whether an
organization should be decentralized but to
what extent to it should be decentralized.

16. Disadvantages
 Expensive
 Lack of Uniformity
 Difficulty in Co-ordination
 lack of specialization
 Hard to make decisions as a
whole

17. DIRECTOR
MARKETING
FINANCE PRODUCTION
MANAGER PERSONNEL
MANAGER MANAGER
MANAGER
2 3
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