Difference Between Centralization and Decentralization

May 26, 2015 By Surbhi S 13 Comments

Centralization vs DecentralizationCentralization and Decentralization are the two types of structures, that can be found in the organization, government, management and even in purchasing. Centralization of authority means the power of planning and decision making are exclusively in the hands of top management. It alludes to the concentration of all the powers at the apex level.

On the other hand, Decentralization refers to the dissemination of powers by the top management to the middle or low-level management. It is the delegation of authority, at all the levels of management.

To determine whether an organization is centralized or decentralized greatly depends on the location of decision-making authority and the degree of decision-making power at lower levels. There is a never ending debate between these two terms to prove which one is better. In this article, significant differences between Centralization and Decentralization, in an organization is explained.

Content: Centralization Vs Decentralization

Comparison Chart
Definition
Key Differences
Conclusion

Comparison Chart

BASIS FOR COMPARISON CENTRALIZATION DECENTRALIZATION
Meaning The retention of powers and authority with respect to planning and decisions, with the top management, is known as Centralization. The dissemination of authority, responsibility and accountability to the various management levels, is known as Decentralization.
Involves Systematic and consistent reservation of authority. Systematic dispersal of authority.
Communication Flow Vertical Open and Free
Decision Making Slow Comparatively faster
Advantage Proper coordination and Leadership Sharing of burden and responsibility
Power of decision making Lies with the top management. Multiple persons have the power of decision making.
Reasons Inadequate control over the organization Considerable control over the organization
Best suited for Small sized organization Large sized organization