2. CENTRALIZED
Top Managers Hold Most
Decision Making Authority
DECENTRALIZED
Lower Level Managers Hold
Significant Decision Making
Authority
3. CENTRALIZATION
The amount of authority and autonomy given to a
multinational divisional manager.
In short, the simple meaning is that the location of most
authority at the upper levels of the organization, it’s
called centralization.
4. Some times you would face this situation in many
companies that if you have ever called a company’s with a
complaint or a special request and been told by the
customer service representative ,’’ I will have to ask my
manager” or “ I am not authorized to do it but I
understood your situation yet I can not do it.”
so you are aware about such type situation’s answer.
5. Therefore, in this type of organization
managers take most decisions even the small
one also, that why the customer service
representative you called couldn’t make a
decision without first asking the manager.
so, in a centralized organization, head
officer will retain the major responsibility and
power.
Headquarter
Production Marketing Finance Personal
6. For an example, reserve bank of India takes
every decision, about C.R.R. (cash reserve ratio) ,
inflation rate, printing money, interest rate etc.
7. Advantages of Centralization
Better co-ordination
Focus on the most
important decision
Improved quality of
work
Flexibility
Personal leadership
Uniformity in action
Reduced cost
9. Delay in work
Remote control
No faithfulness
No secrecy
No special attention
Politics
10. Centralization organization we can see that
Adolf Hitler & Benito Mussolini leadership,
all people against his leadership and result is
that they were lost, so in centralization,
decision will be taken by one person & it
may be correct or wrong, therefore
centralization is not good for organization.
11. Increasing the role of
subordinates in decision making
is decentralization & simple
meaning is that the location of a
significant amount of authority in
the lover levels of the
organization.
Decentralization
12. A organization is decentralization, if it has
a high degree of delegation at all levels
you may have talked to customer service
representative at call center who said “I can
take care of that for you right now.”
It’s mean a person was able to handle your
problem without any input from or
consultation with company ‘s management
13. In this organization workers closest to
problems are authorized to take the
necessary decision to solve the problems
on their own the best way to develop and
retain a close relationship with the
customer .
Customer care
14. How to be a more effective
decentralization
1. Trust your staff
2. Avoid seeking
perfection
3. Instruction
4. Know your interest
5. To help identify
potential problems
6. Praise the effort of
your staff
7. Routinely
decentralization work
8. Provide resources
9. delegate to the lowest
possible level.
15. Advantages
Reducing senior manager’s burden
Increased motivation
Maintenance of Secrecy
Quick decision
Local knowledge
Proximity to the market
As manager in many organization consider
greater decentralization
The important question is not whether an
organization should be decentralized but to
what extent to it should be decentralized.
16. Expensive
Lack of Uniformity
Difficulty in Co-ordination
lack of specialization
Hard to make decisions
as a whole
Disadvantages