Centralization and

Decentralization

 Anything that increases the importance of

subordinates role is
decentralization,everything that goes to
reduce it is centralization
Both are complementary to each other.

 Under centralization, the executive

reserves the authority with himself instead
of delegating it to his subordinates.
+Personal Growth,Less Skilled
Subordinates, Handling Emergencies
-Burden on CEOs,no growth of
subordinates, no initiative

 Decentralization extends to the lowest

level of organization.
+ Reduces burden at top, Easy
diversification,promotes motivation,
initiative and growth

Factors determining degree of

decentralization

Costliness of decision
Uniformity of policies
Size of Organization
Availability of Managers
Management Philosophy