Meaning of Centralization | Features, Types, and Importance

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In this session, we will discuss the meaning of centralization, and the advantages of Centralization, the disadvantages of Centralization, the types of Centralization, features of Centralization, and the importance of Centralization.

Meaning of Centralization

In any kind of business organization, there is centralization and centralization is the type of character display in the organization. Where the organizational decision making, policy, planning, authority, and power all are taken by the top level of management.

In the organization, there is different department and whole department in the working group of subordinates or individuals. All subordinates’ roles reduce in the organization by the top level of management that is also known as centralization.

So it is clearly defined in the organization the office manager and his immediate subordinate, and other subordinates play the second and subsequent fiddles. In fact, the whole organizational managers and his subordinates and other subordinates are not to play any role. Instead, they are asked to work and only work according to the dictates of what the top level of management wants and orders. (meaning of centralization).

Ricky Griffin defines the meaning of centralization, “Centralization is the process of systematically retaining power and authority in the hands of higher-level managers.”

In the session on the meaning of centralization, we will also discuss the features of centralization.

The features of centralization can be dedicated by the following points.
  • Top management makes the decision
  • Authority to makes decision is in the hand of the top level of management only
  • Information flows from the upper level to lower levels
  • Longer time to make decisions
  • Centralization is suitable for a small organization
  • Inflexible in nature

Top management makes the decision

An organization can’t perform smoothly without the top level of management. So for the organization, the part of the top level of management is most important. In the organization, the top level of management takes an important decision. Not the job of the top level of management take only decision whereby the employees have any complaints in the organization the job of the top level of management also listen and provide the solution for them. (meaning of centralization)

Authority to make decisions is in the hand of the top level of management only

In the organization, there is a different level of manager who can run the organization smoothly. But taking decisions about the organization the power in the hand of only the top level of management. And the level of the others of management of the organization can follow the decision taken by the top level of management.

Information flow from the upper level to lower levels

The centralization process is follow in the organization. The information flows from the upper level of management to the lower level of management. The importance of organization decision only the top level of management is responsible for taken and only in the organization implement that decision which is taken by the top level of management. (meaning of centralization).

There are flows in this process as a lower level of management can’t challenge the decision of top management even if they don’t like the decision.

Longer time to make decision

In the organization, there are different levels of management and different department. they all are completely dependent on the top level of management. Because only the top level of management has authority to make a decision and that decision can follow the whole organization employees. Sometimes in the mind of lower management making perfect solutions but they can’t implement them without approval from the top level of management. So that this protocol makes the process quiets slow and ineffective.

Centralization is suitable for a small organization

In the organization according to the centralization results in slow decision making. it is only perfectly suitable for a small organization not for a large organization and makes the decision process complicated. (meaning of centralization)

However, there is a less number of employees and a few levels of management in the small organization that’s because the decision-making centralization process takes a little time in the flow of information from the top level to the lower level and the implementation.

Inflexible in Nature

In the centralization process as the top level of management is responsible for taking all the decisions, Sometimes they end up making an ineffective decision because they are unaware of the ground reality of the organization. (meaning of centralization)

In such scenarios, lower management has a better capability in taking a decision. Therefore, a decentralized system of management helps in taking effective decisions.

In the session on the meaning of centralization, we will also discuss the advantages of the centralization process.

The advantage of the centralization process can be dedicated by the following points
  • A clear chain of command
  • Focused vision
  • Reduced costs
  • quick implementation of decision
  • Improved quality
Meaning of Centralization | Features, Types, and Importance

A clear chain of command

In the organization there is run a clear chain of command then the organization gets always benefits because the whole organization members know whom to report to. Junior employees clearly know who to approach at whatever point. they have concerns about the organization. Then again, senior executives pursuer a reasonable a clear plan of delegating authority to employees who exceed expectations in explicit capacities. The senior executive likewise gains the certainty that to whom they delegate responsibilities to middle-level supervisors and different employees there will be no overlap. A reasonable level of leadership is useful when the organization needs to executive decisions quickly and in a unified manner.

Focused vision

At the point when an organization follows a centralize administrative structure. it can be concerte on the fulfillment of its vision with ease. There are clear lines of correspondence and the senior executive can convey the organization’s visions to workers and guides them towards the accomplishment of the vision. In the absence of centralized management, there will be irregularities in replaying the message to workers because there are no responsible lines of authority. (meaning of centralization)

Coordinating the organization’s vision from the best takes into consideration a smooth implementation of its dreams and procedures. The organization’s partners such as clients, providers, and networks likewise also receive a uniform message.

Reduced costs

A brought together organization holds fast to standard procedures and methods that control the organization which helps reduce office and authorities costs. The main decision makes are house at the organization’s head office or home office, and therefore, there is no requirement for deploying more office and gear to their branches. likewise, the organization doesn’t have to cause extra costs to hire experts for its branches. since critical decisions are make at the head office and after that imported to the branches. The reasonable levels of leadership reduce duplication of responsibilities that may result in extra costs to the organization. (meaning of centralization)

Quick implementation of the decision

In a centralized organization, Choices are made by a small group of people and afterward conveyed to the lower-level of manager. The involvement of just a couple of individuals settles the decision-making process increasingly effective. Since they can discuss the subtleties of each decision in one gathering. The decision is then conveyed to the lower levels of the organization for execution. Be that as it may, if lower-level managers are engaging with the basic leadership process. the process will take longer and clashes will emerge. That will make the usage procedure lengthy and complicate because a few chiefs may object to the choices if their info is ignore.

Improved quality of work

The standardized strategic and better supervision in a brought together association, resulting in improved quality of work. There are supervisions in each department who ensure that the outputs are uniform and of high quality. The use of advanced equipment reduces potential wastage from manual work and also helps guarantee high-quality work. Centralization of work also reduces the replication of tasks that may result in high labor costs. (meaning of centralization).

In the session on the meaning of centralization, we will also discuss the disadvantage of centralization.

The disadvantage of the centralization process can be dedicated to the following points.

  • Bureaucratic leadership
  • Remote control
  • lack of employee loyalty
Meaning of Centralization | Features, Types, and Importance

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