Centralization and Decentralization | Advantages & Disadvantages

Span of management, centralization and decentralization all comes under the heading of authority. It is a range of subordinates who are given instructions to report directly to a particular top level manager. Span of Management is also termed as Span of Control. As per precautions, managers should neither have few subordinates nor too many subordinates. Many researches specify that there is not any entirely correct span of management for managers of any sort. Further, the span of management may be broader or narrower depending on the certain conditions of the managerial jobs. The following are a few features of the entire process of span of management.

• The work of subordinate should have a little interaction with others.
• Managers and their subordinates are highly skilled.
• Subordinates perform similar work
• Infrequent Problems
• Close physical proximity of subordinates to one another
• Managers have to perform a few supervisory duties
• Managers possess further help like assistants or secretaries
• To motivate the subordinates for performing good job, because the work is challenging

Specifically, Span of Management ascertains the range of hierarchal levels in the organization. There are two types of structures associated with the span of management.

Tall Structure: – It is such a structure that comprises a great range of hierarchal levels along with narrow spans of control.

Flat Structure: – It is such a structure that comprises few hierarchal levels along with broader span of control.

Centralization vs Decentralization

• Centralization

It is a rule which means that the power of decision making of the organization remains under control of the top level management. It is also said that everything which decreases the role of subordinates can be termed as centralization because top level management retains everything. There are three types of centralization that are departmental centralization, centralization of performance and centralization of management.

• Decentralization

It is a rule under which the power is deputed to the lower level management. More clearly, it can be termed as the delegation of power to all levels of management across the organization. Everything that enhances the role of subordinates is known as decentralization. In order to take major decision very strictly, the power is retained by the top management.

The organizational structure will be termed as centralized if the decision that are made at lower levels are supposed to pass the strict collection of rules, procedures, and policies and in case the decisions does not give the desired outcome, then they are referred to the higher level management. While on the other hand, an organizational structure is known as decentralized if the decisions that are made at lower levels and passed through strict rules, procedures and policies, but still leave some of issues are left for lower-level management.

Further below are a few advantages of centralization and decentralization, which will help the student, point out how these terms differ from each other.

Advantages of Centralization

1. Centralization is convenient regarding coordination with different individuals and units.
2. Probably, the higher management might be extra professional and experienced that may lead to effective and efficient decision making.
3. Regarding decision-making, the higher management possesses a broad perception as per various situations.
4. It can help avoid the duplication of efforts performed different units across the organization.
5. The leadership that seems strong and efficient is promoted.

Advantages of Decentralization

1. The concentration of top managers stays on the major issues.
2. The job duties of lower-level staff are given the opportunity to improve decision-making.
3. The decision making process can become more fast.
4. The lower-level professionals might know the in-depth condition of the problem, which may result in better decision making regarding the position of the lower-level employees.
5. Similar independent units or departments are merged as a division that allows a convenient measurement of regular outcomes.

The movement of the organization should be towards the decentralized structure when certain conditions are expected/happened that are stated below.

1. If the organization is extra large, whereas the higher-level managers don’t have such knowledge or additional time to sort out all the matters.
2. A few operations are scattered geographically.
3. Top managers are not capable of surviving with complex technology.
4. The uncertain increase in the organizational environment.