Centralization Definition in Management, Disadvantages of Centralization, What is Centralization in Management, Meaning of Centralization. An organization must build strategic and operational selections. wherever and by whom ought to these selections be made? And currently ought to the organization structure be adapted? Centralization and Decentralization square measure 2 opposite ways that to transfer decision-making power and to alter the structure of organizations consequently. The structure lies greatly within the inherent qualities and effects of the structures themselves. Choreographer and wedge describe this all right, “If high managers build the organization’s key selections with very little or no input from below, then the organization is centralized.”
Centralization is claimed to be a method wherever the concentration of deciding is during a few hands. All the necessary call and actions at the lower level, all subjects and actions at the lower level square measure subject to the approval of high management. per Allen, “Centralization” is that the systematic and consistent reservation of authority at central points within the organization. The implication of centralization will be- Definition of Management
- Reservation of deciding power at high level.
- Reservation of operational authority with the center level managers.
- Reservation of operation at lower level at the directions of the highest level.
Under centralization, the vital and key choices square measure taken by high management and also the alternative levels square measure into implementations as per the directions of top level. as an example, during a business, the daddy and son being the homeowners decide concerning the necessary matters and every one the remainder of functions like product, finance, marketing, personnel, square measure applied by the chief and that they need to act as per instruction and orders of the 2 folks. Business Management
Disadvantages of Centralization in Management
Low ever, a centralized set-up suffers from the subsequent disadvantages-
Distinctive to Subordinates: Subordinate in such a group up solely is needed to implement no matter it’s asked to hold out. No independent deciding authority. A mechanical operating forever creates doubtfulness. The subordinate doesn’t take imitative neither is he allowed to try to thus. Therefore there remains no charm in either the work or the organization as he is aware of full well that no higher ladder is there for him as he’s not allowed to require any initiative.
Lack of Secrecy: Secrecy in a very centralized came upon can’t be maintained because the orders and decisions ensue one place and sent to all or any. Moreover, all work on an area, below one roof, one management and one workplace department. so secrecy notwithstanding tried can’t be maintained as effectively as may well be needed.
Delay in Work: fast decision is feasible however solely at the highest level, since decision is take solely by the highest, it’s impossible to require fast call whenever the highest is neither offered neither is during a mood to require one. This ends up in delaying the work since it’s the highest that to require decision and none else.
No Loyalty: Since the imitative isn’t there, charm isn’t there. Zeal is absent. No involvement is there. solely the implementation of job is there. This is often there. This suggests work sort of a machine as ordered. Such a science continuously ne’er works. so neither the work for the organization is treated as own one, clearly type a servant loyalty is expected only if he I allowed to suppose that he’s substantially the a part of the department and also the organization. This is often perpetually missing. This brings lack of loyalty among the operating force.
Bureaucracy: paperwork results in red Taoism. A centralized set-up breads red-Taoism that doesn’t solely delay the work however additionally generally helps within the descending of eye brows as a result of paperwork continuously results in discrimination. There are more information about Importance of Strategic Management in Business.