Centralized & Decentralized organizations | Strength & Weaknesses

Strengths, weaknesses of Centralized organization structure and decentralized organization structure are as follows:

Strengths of Centralized Organization:

1. Centralized organization assumes uniformity of standards and policies among organizational units

2. Allows utilization of remarkable ability in managers by the whole organization as opposed to a solitary unit.

3. Decisions are uniform.

4. Helps eliminate duplication of effort and activity.

Weakness of Centralized Organization

1. Flood communication lines to a few individuals at the top of the organization.

2. Makes great demands on a few managers rather than spreading responsibility.

3. Personalizes decisions to the judgements of a few key decision makers.

4. Forces top managers to possess a broad view that may be beyond their capacity.

5. Gives vast amounts of power to a few individuals

6. Reduces sense of participation for all but a few people.

Strengths of Decentralized Organization

1. Reduces total responsibility to more managerial units.

2. Helps develop more personnel in decision making process.

3. Shortens line of communication.

4. Places decision making close to situation affected by decisions.

5. Allows more people to use skills and talents in decision making.

6. Disperses power among many persons

Weaknesses of Decentralized Organization

1. Lack of uniformity of standards and policies among organizational units.

2. Capable managers are not always available or willing to participate in decision making.

3. Creates problems or coordination among separate organizational units.

4. Inter-unit rivalry can interfere with the total organization’s operation.

5. Requires training programmes that may be time-consuming and costly.

Absolute centralization is impossible in a large business unit because that would mean considerable cost and delay. Absolute decentralization is also not possible, because in that case entire authority will be delegated to lower level managers, and the top manager will be left with no authority.

Leave a Reply




Recent Posts

Advertisement


Related pages


consumer durables examplesadvantages and disadvantages of industrial revolutionwhat is vouching auditfinancial lease vs operating leasecost accounting process costingdefinition amalgamatedoverhead apportionmentadvantages of authoritarian leadershipdefine cashbookpv formula calculatordefine forfeiteddefinition of authoritarian leadershipcentralized organizational structuremeaning of sole trading concernflat file advantages and disadvantagesaverage inventory turnover formulaadvantages and disadvantages of computerized accountingimplementing tqm in an organizationwhat does peril mean in insurancewhat is a profitability ratioexample of fdiexamples of probability and nonprobability samplinglabour efficiency variance formuladifference between a capital lease and an operating leasefull form of eximbills receivable and bills payable meaningbill of exchange drawercooperative company advantages and disadvantagescharacteristic of managerial accountingidbi financial institutiondebentures vs bondsallocation of overheadsformula of material price varianceliquidity ratio equation5 elements of a valid contracttypes of branding strategies in marketingdefine demotionwhat is duplicating machinearr accounting rate of returnadvantages of flow productionrbi regulationinterim dividend meaningida international development associationimportance of flexible budgettypes of branding strategies in marketingcima activity based costingdisadvantages of job costingwhat is bailment in business lawwhat is speculation in the stock marketdisadvantages of farm mechanizationalphabetical filingdifference between process costing and job costingveil of incorporation definitionattornment definitionwhat is the definition of cartelsole tradingadvantages of merchant bankingultr viresrevolving letter of credit sampleformula to calculate current ratiodefine novation agreementmeaning of assignee in insurancebankers cheque definitioncapital turnover ratio interpretationwhat is voidable contractnominal wages definitiontruck wholesalers definitionmeaning of penetration pricingprofitabilty ratiomake or buy decision example accountingdisadvantages of purposive samplingwhen can the corporate veil be liftedconsumable assetshindu undivided family businesssampling in biostatisticsmarginal and absorption costing