The Differences Between the "centralization" and "decentralization"

Questions 1: Explain what are the differences between the "Centralization" and "Decentralization".

Below is the differences between the "Centralization" and "Decentralization":

Centralizaion Decentralization

1. Centralization is the process by which the activities of an organization, particularly those regarding decision making, become concentrated within a particular location and/ or group.

1. Decentralization is the process of dispersing decision making closer to the point of service or action.

2. It is the situation in which decision- making power is at the top of an organization and there is little delegation of authority. 2. It is the policy of delegating decision- making authority throughout an organization (to the subunits of an organization) relatively away from a central authority.

3. Centralization means minimum autonomy and maximum restrictions on operations of subunits of the organization. 3. Decentralization means semi-autonomous public authorities or corporations and transfer the responsibility of planning, management and resources raising to the subunits of the organization.

4. A centralized organization is defined as one in which store practices are mandated from corporate headquarters (HQ) and this results in HQ being the sole source of new ideas.

4. A decentralized organization gives freedom to store managers to adopt their own ideas and disseminates innovations made by the store managers.

5. Average profit in the centralized organization is preferred when innovative opportunities are moderate.

5. Average profit in decentralized organization is preferred when such opportunities are rich.

6. Centralization tends to fare better in environments in which ideas are relatively complex.

6. Decentralization has been partially credited with the success of several ratail chains.

7. The authority to make important decisions is retained by managers at the top of hierarchy. 7. The authority to make important decisions about organizational resources and to initiate new projects is delegated to managers at all levels in the hierarchy.