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Thursday, November 29, 2012

Organizational Design | What is the difference between centralization and decentralization?


What is the difference between centralization and decentralization?
















Answer:
The term centralization refers to the degree to which decision making is concentrated at a single point in the organization. 

The concept includes only formal authority, that is, the rights inherent in one's position. The more that lower-level personnel provide input or are actually given the discretion to make decision, the more decentralization there is. 

An organization characterized by centralization is an inherently different structural animal from one that is decentralized. In a decentralized organization, action can be taken more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives.


Essentials of Organizational Behavior / Robbins & Judge - 10th edition

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