Notes On Centralization and Decentralization In Management:

       Centralization is the systematic and consistent reservation of authority at control points within the organisation. In centralisation all decisions are made at the top level of the organisation. On the contrary decentralization is a systematic delegation of authority at all levels of management and in all of the organization

Importance Or Advantages Of Centralization:
  1. It helps personal leadership.
  2. It provides better co- ordination and integration.
  3. It provides for uniform policies, practices and actions.
  4. It can easily handle any emergency and crises.
  5. It is easier to maintain the secrecy of plans and proposal.
Disadvantages Of Centralization:
  1. It increases burden on the top level of management.
  2. Product or market diversification is not possible.
  3. It requires technically competent and skilled managers.
  4. Chances of increasing employee morale and motivation is very less.
  5. It creates a gap between the top management and the working personnel at ground level: which may be harmful at times.
Meaning Of Decentralization:

       Decentralisation is the systematic effort to delegate to the lowest level of management are authority except that which can only be exercised at the central points.

       Decentralisation divides a large organisation into semi- autonomous decision making units and we have multiple decision making centres spreaded over in the organisation structure.

Importance or Advantages Of Decentralization:
  1. It places decision- making authority, responsibility and accountability closest to the job to the extent possible.
  2. It reduces the job burden of the top executives allowing them to concentrate more on policy formulation, measurement of work performance and planning process.
  3. It provides scope and facilities for developing the greatest number of all- round executives.
  4. Decentralization by gradual expansion of autonomous and self- sufficient divisions prevents multiplicity of layering and levels of organisation.
  5. It facilitates diversification of products and marketing innovations.
  6. It brings about internal and external economies by placing decision making. As low in the organisation as competence and presence of facts permits.
Defects/Dis-advantages Of Decentralization:
  1. It is not suitable for small firms as it increases the cost of running the business.
  2. Decentralisation is of less importance for units with one product line.
  3. Decentralisation provides autonomy and self- sufficiency in the Absence of co- ordination between different autonomous units, decentralization may do more harm than good.
  4. Decentralisation creates obstacles when uniformity of all decisions, policies and procedures is required.