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DIFFERENCES BETWEEN CENTRALIZATION AND DECENTRALIZATION AND THE ADVANTAGES OF CENTRALIZATION AND DECENTRALIZATION

This thesis discusses the differences between centralization and decentralization and the advantages of centralization and decentralization. Centralized and decentralized organization structures are common in both the public and private sectors. Notably, there are several differences between the two. In centralized systems, higher management exclusively holds the planning and decision-making authority. Alternatively, decentralization refers to the dissemination of power by the top to low-level management. The advantages of both are relevant in determining the structure to implement. For instance, a centralized system is suitable for organizations with inadequate management control, whereas a decentralized system is fit for an organization with full management control.

DIFFERENCES BETWEEN CENTRALIZATION AND DECENTRALIZATION

There are numerous differences between the two organization structures. First, centralization is the systematic concentration of authority at pivotal points, whereas decentralization is the structured delegation of power in an organization. Secondly, decentralization is suitable for larger organizations while centralization is best for small-sized organizations. Thirdly, formal communication exists in centralized organizations. Conversely, in decentralization, communication stretches in all directions. Fourthly, decision making is faster in decentralization as the decisions are taken much closer to the actions. Thus, it is essential to understand the advantages. In conclusion, before deciding on the best suitable structure, managers should recognize the disadvantages

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ADVANTAGES OF CENTRALIZATION

There are varying advantages of centralization. Fundamentally, the benefits of centralization include uniformity of decision-making, procedures, and policies, and efficiency of overall organizational activities. Conversely, the advantages of a decentralized system constitute faster decision-making and better quality of decisions, improved morale, and efficiency of both top management and employees. However, there are also some disadvantages of both. For instance, centralized organizations can suffer from the effects of several layers of bureaucracy, resulting in sluggish business operations. In conclusion, the differences also include their varying advantages and disadvantages.

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