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DifferenceBetweenCentralizationandDecentralization(withComparisonChart)KeyDifferences
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Nowadays,twotypesoforganizationalstructurecanbeseen,whicharecentralized
anddecentralized.Centralizationofauthoritymeansthepowerofplanningand
decisionmakingareexclusivelyinthehandsoftopmanagementwhileincaseof
Decentralization,thepowersforthesamehasbeendisseminatedbythetop
managementtomiddleorlowlevelmanagement.Thereisaneverendingdebate
betweenthesetwotermstoprovewhichoneisbetter.Inthisarticlemajor
differencesbetweenCentralizationandDecentralizationisexplained.
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Comparison Chart
BASISFOR
COMPARISON
CENTRALIZATION
DECENTRALIZATION
Meaning
Theretentionofpowersand
authoritywithrespectto
planninganddecisions,with
thetopmanagement,is
knownasCentralization.
Thedisseminationof
authority,responsibilityand
accountabilitytothevarious
managementlevels,isknown
asDecentralization.
Communication
Flow
Vertical
OpenandFree
DecisionMaking
Slow
Comparativelyfaster
Advantage
Propercoordinationand
Leadership
Sharingofburdenand
responsibility
Powerof
decisionmaking
Lieswiththetop
management.
Multiplepersonshavethe
powerofdecisionmaking.
Reasons
Inadequatecontroloverthe
Considerablecontroloverthe
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De nition of Centralization
Apivotlocationorgroupofmanagerialpersonnelfortheplanninganddecision
makingortakingactivitiesoftheorganizationisknownasCentralization.Inthis
typeoforganization,alltheimportantrightsandpowersareinthehandsofthetop
levelmanagement.
Inearliertimes,centralizationpolicywasthemostcommonlypracticedinevery
organizationtoretainallthepowersinthecentrallocation.Theyhavefullcontrol
overtheactivitiesofthemiddleorlowlevelmanagement.Apartfromthatpersonal
leadershipandcoordinationcanalsobeseenaswellasworkcanalsobe
distributedeasilyamongworkers.
However,duetoconcentrationofauthorityandresponsibility,thesubordinate
employeesroleintheorganizationisdiminishedbecausealltherightvestswiththe
headoffice.Therefore,thejuniorstaffisonlytofollowthecommandsofthetop
managersandfunctionaccordingly,theyarenotallowedtotakeactivepartinthe
decisionmakingpurposes.Sometimeshotchpotchiscreatedduetoexcesswork
load,whichresultsinhastydecisions.BureaucracyandRedtapismarealsooneof
thedisadvantagesofcentralization.
De nition of Decentralization
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DifferenceBetweenCentralizationandDecentralization(withComparisonChart)KeyDifferences
Theassignmentofauthoritiesandresponsibilitiesbythetoplevelmanagementto
themiddleorlowlevelmanagementisknownasDecentralization.Itistheperfect
oppositeofcentralization,inwhichthedecisionmakingpowersaredelegatedto
thedepartmental,divisional,unitorcenterlevelmanagers,organizationwide.
DecentralizationcanalsobesaidasanadditionoverDelegationofauthority.
Atpresent,duetotheincreaseincompetition,managerstakedecisionregarding
forthedelegationofauthoritytothesubordinates.Duetowhichthefunctional
levelmanagersgetachancetoperformbetteraswellasfreedomofworkisalso
there.Moreover,theysharetheresponsibilityofthehighlevelmanagerswhich
resultsinquickdecisionmakingandsavingoftime.Itisveryhelpfulprocessfor
theexpansionofthebusinessorganization,likeformergersandacquisitions.
Although,decentralizationlacksleadershipandcoordination,whichleadsto
inefficientcontrolovertheorganization.Foraneffectivedecentralizationprocess,
openandfreecommunicationintheorganizationmustbethere.
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organization,butthereasonfordecentralizationisgoodandeffective
controloverthesame.
Conclusion
Thedifferencebetweencentralizationanddecentralizationisoneofthehottopics
thesedays.Somepeoplethinkthatcentralizationisbetterwhileothersareinfavor
ofdecentralization.Inancienttimes,peopleusedtoruntheirorganizationina
centralizedmanner,butnowthescenariohasbeenchangedcompletelyduetorise
inextremecompetitionwherequickdecisionmakingisrequiredandtherefore
manyorganizationsoptedfordecentralization.
However,centralizationstillexistsinsomeoftheorganizations.Comingtothe
point,noorganizationiscompletelycentralizedordecentralized,theyare
centralizedordecentralizedonlyuptotheextentofthedelegationofauthority.
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FiledUnder:Business
Comments
Debarshisays
October5,2015at6:34pm
Thanksforthispost,pleasepostdifferencebetweenformalandinformal
organisation..:
thanksinadvance
Reply
SurbhiSsays
October6,2015at4:20am
Thanksforyourappreciation,wewillsurelyconsideryouradvice
Reply
Mittaphabsays
November30,2015at2:57pm
Thankyouverymuchforaveryusefulinformation.
Reply
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ojasviipratapsinghsays
December1,2015at5:01am
thanks!!
Reply
SalimM.Msuyasays
March31,2016at9:31am
Thanksalotforyourclearinformationconcerningaboutdecentralization
andcentralization.
Reply
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