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Centralized Vs. Decentralized

The development or growth of a company depends with the strength of managerial staff and employees who help the management to provide career development. Another way of maintaining managerial integrity is a hierarchy, the hierarchy of authority is very important in an organisation. The system in an organisation is divided into two types centralized and decentralized. Centralization means the decision making is actually rest in authority and decentralization means the decision making is given further down the hierarchy which is totally away from the centre. Here we are discussing about two scenarios in an organization. Scenario 1 As a manager holding a top position in a large organisation having good turnover on centralized

System, I decided to make the firm more decentralised. it was really a big risk taking task for me in my career, the main reasons behind my decision are, the decision making power is spread out to the junior managers and to all employees, which helps to implement new and different strategies in an organisation which helps to boost the organisation in this competitive society, it also helps to make the decision making in the right way and in the right time and also the decisions are made very closer to the customer, which helps to increase the customer relationship as the decision making power is having for the lower employees also who interact with the consumer’s and it make a positive impact on the customer about the organisation. Also helps to increase the customer service, which is very important in an organisation. Another positive side of the decentralization is that it is always better able to respond to local circumstances. We can act fast in the local market as per the fluctuations. This decentralized system will help to enable a flatter hierarchy, which give more confidence in employees and helps get more output from employees. Also we can develop the employer skills by giving proper way of training and developing the junior management system. By the facilities getting empowered the staff will get motivated which helps to improve their performance. Decentralisation helps to bring more competition hence good results,


Centralized vs Decentralised also managers can take quick decisions when needed which helps to save money and also the work load of the employers will be very less.

There were lots of barriers too which I foresee, One of the main barrier I faced is the decision making became not necessarily strategic, became very hard to finalise a decision which also affects the fast functioning of the organisation in the market, which leads to unreachable situation along with the market strategies. Also made harder to ensure the consistency of practices and policies at each location. There will be no stable authority to take strong leadership and make strong decisions when needed is one of the main drawbacks. Also it is very harder to achieve tight financial control in the organisation, thus the risk of cost in the organisation will increase and affect very badly when such kind of crisis happens.

As a manager holding a top position in a large organisation having good turnover on decentralization system, I decided to make the firm more centralized. Some of the main reasons behind my decisions are according to centralized system the organisation have a focused vision because the vision is restricted to only one authority. The execution of plan and strategies will take place very quickly which helps to save time, also it is very easy to implement common policies and practises which is needed for the whole business. Centralization prevents other parts of the business from becoming too independent. The budget of the organisation can be easily coordinate and control as it is controlled by a centre. According to this system the target and overhead savings can be easily achieved with high efficiency. The different kinds of serious disagreement or argument will not take place as the organisation is having CENTRALIZED VS. DECENTRALIZED.

Centralization vs decentralization centre hierarchy. These system is a good platform to show strong leadership and by performing well they can achieve a good reputed position in the organization. The decision making in the centralized system is firm, so the actions can be done fast with an exact target.

The problems which foresee during the changing of system in the organisation are, the leader is taking high risk which bring huge stress on the leader. Over stress and risk will badly affect the organisation in taking decisions at right time. The junior managers will show a tendency to become much closer to the customer needs because of the less power they having in the organisation which leads to the profit loss for the organisation. As we know the centralized organisation is a chain system the chance to get affect the whole organisation is very high when any one of the section fails to work in the organisation. Also because of this centre hierarchy system the chance to hear the customers will be less. So the customer satisfaction level will be below average which leads to customer drop or make customers unsatisfied.

Both centralization and decentralization both has upsides and downsides. But in my point of view decentralization would be easier to implement in this real-world scenario. One of the main reason behind my opinion is freedom of decision making in the organisation. In the present world most of the institution has to face lots of challenges in the market, so by having the decision making power of the employees they can also express their views and solutions and new ideas, which help the organisation to implement new strategies in the market specially in this fluctuating condition.

If I get a chance of starting my career in a company I would like to prefer a highly centralised company because I can focus on a specified area or region in the organisation, which helps to improve the skills in that particular position and can perform our best.

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