Centralization vs Decentralization

Topic: Should decision-making authority in an organization be centralized or decentralized?

I. Introduction

Making decisions is a crucial process in obtaining the organizational effectiveness. It is now a challenge for many organizations in delegating decision-making authority within their hierarchies as either centralized management style or decentralized one has its own achievement and detriment. Therefore, the distributing degrees of centralization or decentralization of authority to make decisions are to be consider wisely and carefully in accordance with the changing environment.

II. Body

A. Centralization

When the authority is granted for only upper level managers who will have power to make important decisions in using organizational resources, centralization is the main managing style of the organization. Apparently, other middle and low-level managers are to follow the orders and perform their jobs as instructed. In the business world, the organizations who are centralized their structures like that may grow and prosper or may decline and face serious problems in managing their business.

Organizations under the centralization have certain advantages. As the authority is given to the top persons who seize the highest rights to control all functional units in the organizations, it is easy for managers to coordinate the organizational activities as well as to plan new strategic projects. The managers at all levels are to run their functions in the same direction and they tend to concentrate on the organizational goals rather than their own departmental goals. As the result, the organizational performance may better improve and organizations themselves can avoid unnecessary scandals. The case of Waste Management plant, for example, is the one who got into trouble with decentralized management style (Jones, 2010, p.127). The top people at the plant wanted to focus on the profit while attempting to reduce costs so the decision-making process...