In a centralized organization, the whole organization assumes total responsibility for the

decisions and processes which it adopts or approves and, therefore, leaves the determination
and execution of individual policies and actions to higher levels of management. Sometimes a
centralized organization's hierarchy is based on political, economic, or other kinds of groups.
Decisions which affect the whole organization are made collectively by the groups of
managerial level. (Wickelgren, M. 2019)

All corporations have a centralized organization, and this has caused very negative effects.
People in these organizations tend to be at each other’s throats and have competitive drives.
The organization develops and stays the same, and many of the employees become hard to
place and find companies with a career path outside. Unitary structures and unitary board are
two common examples of hierarchical structures. (Mookerjee, V. 2018)

Decentralization is when one person or department controls every aspect of a business, there
will inevitably be delays and inefficiencies in decision-making and overall efficiency. In
decentralized organizations, as much as possible, activities of the people who are part of the
unit will be considered in the same manner and context as activities of the larger company. The
highest-level manager may be an independent supervisor or a liaison between the upper and
lower levels of management. while higher-level organization and functions, such as financing,
are distributed amongst a highly-productive decentralized network of individual workers,
dealers and entrepreneurs. (Wickelgren, M. 2019)

Government bureaucracy, financial capitalism, and business management may all be

considered forms of the decentralization process. Moreover, a powerful example of
decentralized organization is the human body. A healthy body is composed of organs that are
joined together to perform specific tasks. With the effect of decentralizing decision-making
responsibilities in favour of groups of humans with a basic grasp of how to make and execute
decisions. Distributed network systems as well as distributed computation also can be
considered part of the decentralized organization. In decentralized organizations, there are
fewer senior staff with more advanced knowledge and insights, and more developers and tech
teams at different levels. They have the freedom to act based on their expertise, and make
decisions at their own. (Mookerjee, V. 2018)
References:

Andersson, T., Cäker, M., Tengblad, S., & Wickelgren, M. (2019). Building traits for
organizational resilience through balancing organizational structures. Scandinavian Journal of
Management, 35(1), 36-45.

Liu, D., Tan, Y., & Mookerjee, V. (2018). When ignorance can be bliss: Organizational
structure and coordination in electronic retailing. Information Systems Research, 29(1), 70-83.

Replies:

1. A decentralized organization, the one where decisions are made at the level of the
group's membership, is said to be a crowd-powered organization or a participatory
organization. The need for a decentralized structure has become increasingly apparent
as traditional centralized organizations have been increasingly threatened by the growth
of participatory organizations. Top or the executive level of the organization, which is
seen as the most important level in the organization. This hierarchical structure, with
its clear lines of authority, leads to effective group decision-making and control, and
also facilitates strong positive intergroup relations. If things are done at this level, there
is greater trust between members, decision-making is clear, there is greater integrity
and overall decision-making is better, so people are more willing to invest in and
contribute to the group as a whole. But there are also some changes to the way that
decisions are made if we move down to the level of the industry, meaning small
businesses and start-ups.
2. Many organizations that make decisions at the top are not relevant to the bottom of the
organization. Management cannot even perform basic tasks at the bottom of the
organization due to numerous conflicts that arise. The hierarchy acts as a guide for
decision making. It lets you know what is the right thing to do and how to do it. The
hierarchy is often a necessary initial stage in organizational development. It helps you
assess risks, priorities and boundaries. It helps you protect your organizational assets
while also doing the job the way it should be done. middle and lower-level
managers who are empowered to coordinate decision-making among groups of
professionals in an organization. Instead of reporting directly to management,
participants in this decentralized structure process information and communicate with
each other. This is often referred to as democratic management. This is a typical process
in large companies where there is plenty of scope to discuss specific decisions with
managers, but they are usually handled at the highest level.