Centralization vs.

Decentralization in a Multi-Unit Organization Centralization is defined as a process by which the activities and operations of an organization, especially those pertaining to making of decision and planning, are centered or concentrated within a specific location, area, or group. All or most of the managerial, decision-making power of an organization's hierarchy and its main departments are affected by being re-located to one facility. In business studies, the process of centralization and decentralization is being practiced so that, decisions relating to an organization are made in accordance to the chain of command. The process of centralization is therefore simply the concentration of organizational powers and authority of top managerial positions. It entails everything, which involves the reduction of the importance of subordinates duties and roles in any given organization. In many business organizations, the process is a spotlight of control and pre-eminence, which is in the control of very few individuals. Just like the implementation and enactment of any concept, the implementation and enactment of this process of centralization, will bring forth, both positives and negatives consequences. Having said the above, the positive and negative aspects of this process are as discussed below: The advantages of centralization: Equal work distribution Centralization results into equal workload distribution. This happens not only between, individual workers but also between different departments of an organization. This results into the speedy economic growth and development of an organization. It facilitates the fixing of responsibility

If an organization has an equal work, distribution channels, the task of fixing and allocation responsibility becomes easy and flexible. This greatly improves the working, output, and efficiency of an organization. Uniformity of activities It is obvious that when an organization is centralized, its activities will be in the control of an individual or one director. This result into its activities being, uniform and therefore ensuring uniformity in any decision making process. It facilities personnel leadership Centralized business organization assists individuals in establishing their personnel managerial and leadership skills. This may have the ability to convert a falling business organization into a profit-making one due to an efficient, purposeful, and non-controversial centered leadership. Specialization It encourages specialization of work as well as processing and handling of the work by the subordinate members, who are specialized in their different working areas. This also propels the overall performance of the organization. Enhancement of standardization and training facilities Centralization helps in standardizing work and therefore aids in extending of training facilities to every worker in the organization. This enables the new organizations member to adjusted and accommodated easily in such set-ups. Greater flexibility

If an emergency arises, the uniformity of activities helps in adjusting the operations, procedure, and decisions making. The adjustment generates flexibility for organizations to develop in greater degrees. No duplication of work Uniformity of organizational activities, centralization of personal leadership, and specialization leave no chance for work duplication in the organization. This helps in avoidance of the extra labor and costs involved in duplication, leading to sustainability of the organizations economy. Quick decision It is necessary and mandatory that decision-making should be done quickly to take advantage of rare opportunities that might come in the way and might slip away, if nothing is done. Centralized business organization helps in the making of such a quick decision. Effective control Specialization, standardization, and uniformity in activities facilitate higher degree of self and departmental effective, co-ordination, supervision, integration. This ensure an effective control in the organization.

Disadvantages of centralization Centralized organizations face the following disadvantages: Delay in work.

Since only the top management usually takes decision-making, it is not possible to implement them as quick as possible to their subordinates so that work can be done. The delay in implementation results in delay of the work since it is the managers who initiate the decision and not anyone else. Distinctive to subordinates Subordinate in a centralized organization is only required to curry out and implement whatever he or she has been asked to do. They are no expected to make independent decisions. They do not take any imitative nor are allowed to part in any major decision making. This may lead to them being demoralized and lack the zeal to perform their duties promptly. Lack of secrecy It is hard to maintain secrecy in a centralized organization, being that the decisions and orders come from one place before being conveyed to all. All work being placed under one roof, one management, control, and one set-up, no room is left for holding any secrets. This minimizes the ability of the organization to maintain any secrets relating to its management even if tried as effectively as might be desired. No loyalty Since there are no initiative, charm, and zeal will automatically be absent. This leads to law levels of participation and involvement in most organizations issues. This means workers will view the organization as being not part of them and as being owned by the managers. It is obvious that a servant loyalty is experienced only when he or she is involved and allowed to think and be part of the departmental and organizational decision-making. This aspect is always

lacking in most centralized organizations and therefore, the increased lack of loyalty among the employees and subordinates.

It is therefore not easy to uphold centralization. There exists a thin line between the disadvantages and advantages in the outcome of the adaption of this concept. It requires a steady and clever yet conscious way of management in order to be sustained for a longer period, owing to the fact that the most important factor, such as secrecy, cannot be easily maintained in such organizations.