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Difference Between Centralization and Decentralization (with Comparison Chart) ­ Key Differences

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Di᙭韈erence Between Centralization and
Decentralization
May 26, 2015 By Surbhi S  — 5 Comments

Nowadays, two types of organizational structure can be seen, which are centralized
and decentralized. Centralization of authority means the power of planning and
decision making are exclusively in the hands of top management while in case of
Decentralization, the powers for the same has been disseminated by the top
management to middle or low level management. There is a never ending debate
between these two terms to prove which one is better. In this article major
differences between Centralization and Decentralization is explained.

http://keydifferences.com/difference­between­centralization­and­decentralization.html

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5/5/2016 Difference Between Centralization and Decentralization (with Comparison Chart) ­ Key Differences Content: Centralization Vs Decentralization 1. is known as Decentralization. Definition 3. is known as Centralization. Multiple persons have the power of decision making. Key Differences 4. Comparison Chart 2.html 2/10 .com/difference­between­centralization­and­decentralization. Communication Flow Vertical Open and Free Decision Making Slow Comparatively faster Advantage Proper coordination and Leadership Sharing of burden and responsibility Power of decision making Lies with the top management. The dissemination of authority. with the top management. Conclusion Comparison Chart BASIS FOR COMPARISON CENTRALIZATION DECENTRALIZATION Meaning The retention of powers and authority with respect to planning and decisions. Reasons Inadequate control over the Considerable control over the http://keydifferences. responsibility and accountability to the various management levels.

5/5/2016 Best suited for Difference Between Centralization and Decentralization (with Comparison Chart) ­ Key Differences organization organization Small sized organization Large sized organization Regus O⁴ce Solutions Flexible O⁴ce to Suit Your Needs. all the important rights and powers are in the hands of the top level management. in Prime Locations+IT+Receptionist. Bureaucracy and Red­tapism are also one of the disadvantages of centralization. In earlier times. which results in hasty decisions.html 3/10 . De nition of Centralization A pivot location or group of managerial personnel for the planning and decision making or taking activities of the organization is known as Centralization. Apart from that personal leadership and coordination can also be seen as well as work can also be distributed easily among workers. De nition of Decentralization http://keydifferences. However. the junior staff is only to follow the commands of the top managers and function accordingly. the subordinate employees role in the organization is diminished because all the right vests with the head office. Sometimes hotchpotch is created due to excess work load. In this type of organization.com/difference­between­centralization­and­decentralization. They have full control over the activities of the middle or low level management. Therefore. due to concentration of authority and responsibility. they are not allowed to take active part in the decision making purposes. centralization policy was the most commonly practiced in every organization to retain all the powers in the central location.

 divisional. managers take decision regarding for the delegation of authority to the subordinates. Moreover. they share the responsibility of the high level managers which results in quick decision making and saving of time. which leads to inefficient control over the organization. communication stretches in all directions. in the hands of high level management is known as Centralization. Decentralization means dispersal of powers and authorities by the top level to the functional level management. 2.5/5/2016 Difference Between Centralization and Decentralization (with Comparison Chart) ­ Key Differences The assignment of authorities and responsibilities by the top level management to the middle or low level management is known as Decentralization. 4. On the other hand. Although. 3. in decentralization. Decentralization can also be said as an addition over Delegation of authority. shares the burden of the top level managers. Due to which the functional level managers get a chance to perform better as well as freedom of work is also there. The unification of powers and authorities. It is the perfect opposite of centralization. It is very helpful process for the expansion of the business organization. 6. decentralization lacks leadership and coordination. like for mergers and acquisitions. 5. in which the decision making powers are delegated to the departmental. due to the increase in competition.com/difference­between­centralization­and­decentralization. For an effective decentralization process. open and free communication in the organization must be there. Centralization is best for a small sized organization. There is full leadership and coordination in Centralization. In centralization due to concentration of powers in the hands of a single person. unit or center level managers. Decentralization. In centralization formal communication flow is there. Key Di᙭韈erences Between Centralization and Decentralization The following are the major differences between centralization and decentralization: 1. At present. organization wide. the decision takes time. decentralization proves better in terms of decision making as the decisions are taken much closer to the actions. Conversely. but large sized organization should practice decentralization.html 4/10 . The reason for centralization is inadequate control over the http://keydifferences.

 Coming to the point. Some people think that centralization is better while others are in favor of decentralization. no organization is completely centralized or decentralized. centralization still exists in some of the organizations. In ancient times.com/difference­between­centralization­and­decentralization. You Might Also Like:   Difference Between Delegation and Decentralization   Difference Between Management and Administration http://keydifferences.html   Difference Between Leader and Manager 5/10 . they are centralized or decentralized only up to the extent of the delegation of authority. However. but now the scenario has been changed completely due to rise in extreme competition where quick decision making is required and therefore many organizations opted for decentralization. people used to run their organization in a centralized manner. Conclusion The difference between centralization and decentralization is one of the hot topics these days.5/5/2016 Difference Between Centralization and Decentralization (with Comparison Chart) ­ Key Differences organization. but the reason for decentralization is good and effective control over the same.

 2015 at 6:34 pm Thanks for this post. please post difference between formal and informal organisation. Reply http://keydifferences. 2015 at 2:57 pm Thank you very much for a very useful information. 2015 at 4:20 am Thanks for your appreciation.com/difference­between­centralization­and­decentralization.html 6/10 . we will surely consider your advice Reply Mittaphab says November 30.5/5/2016 Difference Between Centralization and Decentralization (with Comparison Chart) ­ Key Differences   Difference Between Supervisor and Manager   Difference Between Strategy and Policy Difference Between Policies and Procedures Filed Under: Business Comments Debarshi says October 5.. :  thanks in advance  Reply Surbhi S says October 6.

Reply Leave a Reply Your email address will not be published.com/difference­between­centralization­and­decentralization. 2016 at 9:31 am Thanks a lot for your clear information concerning about decentralization and centralization. 2015 at 5:01 am thanks!! Reply Salim M. Msuya says March 31.5/5/2016 Difference Between Centralization and Decentralization (with Comparison Chart) ­ Key Differences ojasvii pratap singh says December 1.html 7/10 . Required fields are marked * Comment Name * Email * http://keydifferences.

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