Factors affecting centralisation and decentralisation

The terms "centralized" and "decentralized" are important management concept. Where there is decentralisation, the company will not be in a position to take the advantages of uniformity of policies because of different habits and talents on the part of different persons.

There will be a centralized buying and selling. Thus the key to safe decentralization is adequate training of managers. Size The larger the organization, the more decisions to be made and the more places in which they must be made, the more difficult it is to coordinate them.

All are held accountable for their personal, individual conduct. The principle of specialization applies to a limited extent with reference to the territory that a deconcentrated unit is responsible for.

In the zeal to overcome the disadvantages of size by reducing the decision-making unit, certain shortcomings of decentralization should not be overlooked. Control techniques Another factor affecting the degree of decentralization is the state of development of control techniques.

These managers frame policies for their units. The interaction of coalitions is illustrated in Figure 2. Moreover one Factors affecting centralisation and decentralisation cannot meet and know the reactions of customers regarding products and service. They emerge only if decentralisation is not effectively planned and followed.

The organizational structure of the United States Military is an example of a centralized organization.

Striking a Balance: Centralised and Decentralised Decisions in Government (WP 02/15)

Centralization is generally successful in small-scale enterprises. CSOs are highly specialized at grassroots level, but their higher level organizations are often involved in several lines of activities of a social and productive nature.

Centralization: Factors, Advantages and Disadvantages

A specific agenda concerning the entire territory of a country, for example: The formal Organization refers to the formal relationships of authority and subordinates within a company. In that organization, many organization-effecting decisions are made by executive level officials or preset policies.

The degree of centralization and decentralization will depend upon the amount of authority delegated to the lowest level. To what extent would those procedures interfere with the detailed allocation of resources by local government to the extent that their freedom of initiative is jeopardized?

Their decisions are taken at different levels. If a business is growing fast and facing the complex problems of expansion, its managers, particularly those responsible for top policy, may be forced to make a large share of the decision.

Nobody is given the authority to use his own judgment even if there are glaring lacunae in the decisions.

Centralization and Decentralization

Over Burden of Few: The Philosophy of the Management: Classification of goods However, for many agricultural services the degree of excludability or rivalrousness is often determined by the precise nature of the service and the conditions under which it is delivered.

However, some anarchists have, in turn, responded to his argument, by explaining that they do support a very limited amount of centralization, in the form of freely elected and recallable delegates. They may wish to ensure that customers will be treated alike with respect to quality, price, credit, delivery, and service; that the same policies will be followed in dealing with suppliers; or that public relations policies will be standardized.

Delegation provides better managers and a higher degree of efficiency. Thus, accountability flows upward in the organization. He is consulted for every type of guidance and his counselling is final.

In a decentralization concern, authority in retained by the top management for taking major decisions and framing policies concerning the whole concern. But what about technical and cost specifications of services provided where questions of general interests are not evident or remote?

Where and by whom should these decisions be made? History of the Enterprise: Considerable increases in efficiency are likely to result from making the unit small enough for its top executives to be near the point where decisions are made. Once the basic structure of organisation is designed, plans and standards for measuring performance are made and techniques of coordination and motivation are laid, managers decentralise the enterprise by delegating operating authority to lower level managers.

Jurisdictional spillover The impact of externalities can vary enormously in terms of the geographical area or number of people affected.

When sales are done in large quantities then customers are offered better terms and low prices. Low risk of not-invented-here behavior. When control system is reliable, there is better and higher decentralization of authority to the lower level.

Difference between centralization and decentralization? Power configurations Power is the capacity to affect the behaviour, the output, and eventually the outcome of organizations.

In any organization, relatively high degree of centralized authority may be needed when new values and viewpoint are establishes by the executives 3.Nevertheless there are a number of common factors that are generally applicable to questions of centralisation and decentralisation.

This paper identifies those factors in order to provide some guidance for decisions regarding the location of decision rights. Centralization and decentralization are the categories by which the pattern of authority relationships became clear. The degree of centralization and de-centralization can be affected by many factors like nature of operation, volume of profits, number of departments, size of a concern, etc.

Keywords: centralization and decentralization,definition and explanation, differences and similarities. I. INTRODUCTION The term centralization means concentration of authority at the top of the administrative system.

• Factors affecting centralisation and decentralisation. 3. Centralisation • “Centralization is the systematic and consistent reservation of authority at central points within an organization”. Decentralisation of Authority: Meaning, Factors and Process.

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Chapter 4 » Factors affecting decentralization | Business Studies – XII

Meaning of Decentralisation 2. Factors affecting Decentralisation 3. Process 4. Degree 5. Importance 6. Limitations. Some degree of centralisation or decentralisation is essential in every functional area.

Factors affecting the degree of centralization and decentralization are: Importance of the decision: How would be decision made affect the culture and image of the organization.

What is the difference between a centralized and decentralized organization?

Size of the.

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Factors affecting centralisation and decentralisation
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