Decentralization Vs. Centralization

Decentralization is a fundamental aspect of delegations: to the extent that authority is not delegated, it is centralized. Absolute centralization in one person is conceivable. But it implies no subordinate managers and therefore no structured organization. Consequently. It can be said that some decentralization characterizes all organizations. On the outer hand. There cannot be absolute decentralization, for if managers should delegate all their authority, their status as managers would cease, their position would be eliminated, and there would. Again, be no organization. Centralization and decentralization arc therefore tendencies: they arc qualities like "hot" and "cold".

Furthermore, centralization often refers to departmental activities. Service divisions centralize similar or specialized activities in a single department. But when centralization is discussed as an aspect of management. It refers to withholding of delegating authority for decision-making.

Although closely related to delegation of authority. Decentralization is something more: it reflects a philosophy of organization and management. It requires careful selection of what decisions to push down into the organization structure and what to hold at or near the top. Specific policy-making to guide the decision-making. Selection and training of people. And adequate controls. A policy of decentralization affects all areas of management and can be looked upon as an essential element of a managerial system. It is a fact that, without decentralization, managers cannot use their discretion to handle the ever-present and ever changing situations they continually face.