Centralization

CENTRALIZING ORGANIZATION...........

1. Henri Fayol   (French  mining engineer and director of mines) who developed a general theory of business administration has introduced the 14 principles of management which are very dynamic in nature. Among those, the 8th principle is CENTRALIZATION…

2. CENTRALIZATION

3. Second year bachelor OF accounting and financing. Presented by: Akash dhurandhar . Dhanashree shinde .

4. ..INTRODUCTION.. The amount of authority and autonomy given to a multinational divisional manager. In short, the simple meaning is that the location of most authority at the upper levels of the organization, it’s called THE centralization .

5. What is centralization? Centralization is the degree to which decision making takes place at upper levels of the organization. If top managers make key decision with little input from below, then the organization is more centralized. KeepING in mind that centralization is relative not absolute- that is, an organization is never completely centralized.

6. Finance Manager Executive Director Admin. Officer Finance Executive Asst. Manager Operations Manager SENIOR MANAGER Centralization means reservation of authority at central point within the organization. In centralization, control and decision making reside at the top levels of management…

7. Some times you would face this situation in many companies that if you have ever called a company’s with a complaint or a special request and been told by the customer service representative ,,, ’’ I will have to ask my manager” or “ I am not authorized to do it but I understood your situation yet I cannot do it.” so you are aware about such type situation’s answer.

8. Therefore, in this type of organization, managers take most decisions even the small one also. Thus the customer service representative you called couldn’t make a decision without first asking the manager. so, in a centralized organization, head officer will retain the major responsibility and power.

9. More centralization… Environment is stable. Lower level managers are not as capable or experience at making decisions as upper level managers. Lower level managers do not want to have a say in decisions. Decisions are significant. Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depend on managers’ retaining say over what happens.

10. Factors influencing centralization Factors influencing . . . Size and dispersal of operation Level of diversity of product-lines Nature of growth Nature of Business Quality of Executives Management by Exception Effective Control System

11. implication of centralization Reservation of decision making power at top level . Reservation of operating authority with the middle level managers. Reservation of operation at lower level at the directions of the top level.

12. Applications of centralization Small businesses often operate in a centralized manner simply because of the smaller size of their workforces A small business owner may be the only manager in the entire company, with all other employees reporting directly to the owner. Organizational designs can change as small companies grow, however

13. A trucking company is an example of a company with a centralized organizational design Trucking company managers make all operational decisions, sending information to individual drivers through dispatchers Continued…

14. Limitations of Centralization Development of low level managers are hampered . Opportunity given to exercise initiative and judgment is negligible . It is a costly affair and delays decision making . It creates problems of effective communication. No scope of specialization as a person may have to look into many things.

15. Arguments for Centralization Centralization can facilitate coordination. Centralization can help ensure that decisions are consistent with organizational objectives . Centralization can avoid duplication of activities by various subunits within the organization. By concentrating power and authority in one individual or a management team, centralization can give top-level managers the means to bring about needed major organizational changes.

16. Examples of Centralization Dictatorship : Dictatorships are usually ruled by a single powerful figure, the easy to spot sign of a centralized organization. If you can stop the leader, you can destroy the entire group . Military : Traditionally, the military has been the classic example of top-down or hierarchical management. The General orders the Captain who orders the Lieutenant who orders the lower subordinates…..

17. Continued… Government : Governments are classic top-down structures lead by the President or Prime Minister, followed by Senators or Ministers who each have a team below them.

18. Television : TV shows are created by centralized organizations that decide what we watch and when we watch it. And, if think literally about it, one message is sent down the airwaves for us to watch at the other end. Continued…

19. reserve bank of India : reserve bank of India takes every decision about C.R.R. (cash reserve ratio) , inflation rate, printing money, interest rate etc. also rbi takes all the important decisions relating to all the banks... Continued…

20. Examples of Fusion centralization Wikipedia : Comprised of thousands of volunteers, Wikipedia is based on a wiki or open platform for editing the encyclopedia entries. A skeleton staff of employees oversee the venture .

21. Facebook : Whilst the organization provide the platform for listings, users are free to post what they like within the guidelines set out by the platform owners. Continued…

22. Advantages of Centralization Better co-ordination. Focus on the most important decisions. Improved quality of work. Flexibility. Personal leadership. Uniformity in action. Reduced cost.

23. Disadvantages of Centralization Delay in work. Remote control. No loyalty. No Secrecy. No special attention.

24. In the 19 TH CENTURY, WE SAW that Adolf Hitler & Benito Mussolini’S leadership, all people WERE against THEIR leadership and THE result WAs that they were lost. so in centralization, decision will be taken by ONLY one person & it may be correct or wrong, therefore centralization is not good for organization.

25. WHEN WE TALK ABOUT CENTRALIZATION, AUTOMATICALLY THE TERM COMES IN OUR MIND IS WHAT IS DE CENTRALIZATION COMPARED TO CENTRALIZATION ????

26. Some of the books on . Centralization .

27. Some recent news updates on . Centralization . Year 2016.

28. Continued… Year 2015.

29. Year 2012. Continued…

30. …Conclusion… The difference between centralization and decentralization is one of the hot topics these days. Some people think that centralization is better while others are in favour of decentralization. In ancient times, people used to run their organization in a centralized manner, but now the scenario has been changed completely. due to rise in competition where quick decision making is required and therefore many organizations opted for decentralization. However, centralization still exists in some of the organizations.

31. Coming to the point, no organization is completely centralized or decentralized, they are centralized or decentralized only up to the extent of the delegation of authority.

32. People say, " If it's decentralized it will be inefficient." we think that's fine . Let it be inefficient.

33. "No  centralized  planning, no autocratic rule and no military regime can produce what a free man can do .”