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    Centralization and Decentralization

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    sagarpankaj
    This document discusses centralization and decentralization in organizations. It defines centralization as the reservation of authority at central points within an organization, while decentralization is the systematic delegation of authority. The document outlines different types of centralization and decentralization, as well as determinants that influence how decentralized an organization is. Benefits of both centralization and decentralization are provided. Limitations of each approach are also presented.

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    Centralization and Decentralization

    Uploaded by

    sagarpankaj
    1K views15 pages
    This document discusses centralization and decentralization in organizations. It defines centralization as the reservation of authority at central points within an organization, while decentralization is the systematic delegation of authority. The document outlines different types of centralization and decentralization, as well as determinants that influence how decentralized an organization is. Benefits of both centralization and decentralization are provided. Limitations of each approach are also presented.

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    centralization and decentralization of authority.

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    centralization and decentralization

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    This document discusses centralization and decentralization in organizations. It defines centralization as the reservation of authority at central points within an organization, while decentralization is the systematic delegation of authority. The document outlines different types of centralization and decentralization, as well as determinants that influence how decentralized an organization is. Benefits of both centralization and decentralization are provided. Limitations of each approach are also presented.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    1K views15 pages

    Centralization and Decentralization

    Uploaded by

    sagarpankaj
    This document discusses centralization and decentralization in organizations. It defines centralization as the reservation of authority at central points within an organization, while decentralization is the systematic delegation of authority. The document outlines different types of centralization and decentralization, as well as determinants that influence how decentralized an organization is. Benefits of both centralization and decentralization are provided. Limitations of each approach are also presented.

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 15

    Centralization and

    Decentralization

    Prepared by
    Pankaj Dobariya
    Email: pk_dobariya@yahoo.com
    Content

     Definition
     Types of (De) Centralization
     Determinants of decentralization
     Benefits of (De) Centralization
     Limitation of (De) Centralization
    (De)Centralization

     According to Louis Allen, “Centralization is the


    systematic and consistent reservation of authority at
    central points within an organization.”
     “Decentralization applies to the systematic
    delegation of authority in an organization.”
     According to Henry Fayol ”Every thing that goes to
    increase the importance of subordinate’s role is
    decentralization, every thing which goes to reduce it
    is centralization”.
    Chart of (De)
    (De)Centralized structure
    Types of centralization

     Centralization of performance

     Departmental centralization

     Centralization as an aspect of management


    Types of decentralization

     Physical and geographical location

     Functional decentralization
    Determinants of decentralization

     Size of organization
     The history of the company – how have
    things been done in the past
     The nature of the decisions – riskier
    decisions tend to be centralized
     Availability of managers – authority requires,
    quality of managers
    Cont..

     Abilities of lower level managers – will they


    be able to handle the challenges
     The general economic situation – recession –
    more centralization
     Control techniques
    Why do companies Centralize?

     For personal leadership


     For integration of efforts
     To handle emergencies
     Scarcity of managerial manpower
     For easy communication and control
     To reduce wastage of efforts
    Why do companies Decentralize?

     To reduce work burden of top management


     To facilitate growth and diversification
     Sometimes, subordinates or lower levels may
    have more expertise
     Stimulus for motivation and also helps
    develop lower level personnel
     Promotes development of general mangers
    Limitation of centralized structure

     Not suitable
    – for large organizations
    – for them who produce multiple products
    – Operating in different geographical location
     Increase burden on the top executive
     Neglect of human element
    Limitation of decentralization

     Not followed properly – inadequate planning


    and control – create chaos
     Increase cost – facilities, training
     Require qualified manager – otherwise fail
     Require high degree of self-motivation and
    self-control
     May affect external forces – national labor
    unions, tax policies
    How to make decentralization effective

     Centralized top policy and control

     Appreciation of concept of decentralization

     Development of managers

     Competition among units


    (De) Centralization and
    Woodward’s study
     Routine technologies/mass production –
    centralized
     Craft technologies – decentralized – production
    employees obtain decision authority because
    of expertise
     Process – employees with technical training
    acquire moderate decision making authority
    because their technical knowledge is important
    to do the job
    THANK YOU…

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