Centralization and Decentralization

Questions 1: Explain what are the differences between the “Centralization” and “Decentralization”.

Below is the differences between the “Centralization” and “Decentralization”:
|Centralizaion |Decentralization |
|Centralization is the process by which the activities of an |Decentralization is the process of dispersing decision making |
|organization, particularly those regarding decision making, |closer to the point of service or action. |
|become concentrated within a particular location and/ or group. | |
|It is the situation in which decision- making power is at the top|It is the policy of delegating decision- making authority |
|of an organization and there is little delegation of authority. |throughout an organization (to the subunits of an organization) |
| |relatively away from a central authority. |
|Centralization means minimum autonomy and maximum restrictions on|Decentralization means semi-autonomous public authorities or |
|operations of subunits of the organization. |corporations and transfer the responsibility of planning, |
| |management and resources raising to the subunits of the |
| |organization. |
|A centralized organization is defined as one in which store |A decentralized organization gives freedom to store managers to |
|practices are mandated from corporate headquarters (HQ) and this |adopt their own ideas and disseminates innovations made by the |
|results in HQ being the sole source of new ideas.