Centralization & Decentralization- Definition, Advantages, Disadvantages

Centralization & Decentralization- CLEAR EXPLANATION ABOUT Definition, Advantages, Disadvantages of both with PICTURES, HR FUNCTIONS, operations, stratergies

1. STAFF CONCEPT & FUNCTIONAL AUTHORITY CHAPTER GROUP - 1 By S. EVANGELENE KEZIAH

2. FUNCTIONS OF MANAGEMENT ORGANIZING: STAFF AUTHORITY DELEGATION OF AUTHORITHY CENTRALIZATION DECENTRALIZATION

3. ROLE OF HUMAN RESOURCE (HR) MANAGEMENT IN ANY BUSINESS In everything EMPOWERMENT & AUTHORITY is passed

4. Business owners should carefully consider which type of organization establishment (Eg: Factory, Textile, Mall, Institution, etc…) CONSIDERATIONS Larger organizations usually require both centralization & decentralization structure since such companies can have several divisions or departments All Organization depends on the growth and expansion of business operations but DELEGATION OF AUTHORITY is important

5. What is DELEGATION ? Delegation is the assignment of work assigned with authority from one person to another person to carry out specific activity or task. P rocess of distributing entrusting work to another person. Provides too much input, direction, and review of delegated work with empowering authority to a subordinate . AUTHORITY or ASSIGNMENT is SHARED

6. R easons - someone may decide to delegate : To free themselves up to do other tasks To produce qualified person To solve any issue & to share work Power & work is TRANSFERED To develop someone else's ability Delegation - essential element of effective management

7. THINGS CONSIDERED IN :

8. TYPES OF DELEGATION

9. IMPORTANACE OF DELEGATION Dividing of work/ division of task Heavy workload & stress is reduced Better & quick decisions are done Can maintain healthy relationship Multi Works are done at same time Improve job satisfaction Manager is little free

10. FACTORS AFFECTING DELEGATION Lack of acceptance by subordinates for some task/work Willingness to let go Fear of employees (example: Freshers ) Lack of control Lack of incentives Lack of self-confidence Irresponsibility Working atmosphere Free flow of information & communication

11. CENTRALIZATION In a management structure where decision making is done by those with a broader perspective & have considerable knowledge and information about what needs to be done . In a centralized organization decisions are made by Higher management or Top level management are typically communicated to lower organization. Decision making at high level They have the supreme power & authorities Eg : Managing Director, board of directors, managers of each department, etc… “ Everything that goes to increase the importance of the subordinate’s role is decentralization; everything that goes to reduce it is centralization.” - Henry Fayol

12. Admin. Officer Senior Manager Finance Executive Asst. Manager Executive Director Oper-ations Manager Finance Manager DECISION-MAKING & AUTHORITY RESIDE AT THE TOP LEVELS OF MANAGEMENT

13. ADVANTAGES OF CENTRALIZATION Equal facilities provided to all departments (employees) Objectives, motive, work plan framework will be clear Proper decision making is done Reduce unnecessary cost Have a central administrative control Have healthy relationship with all different departments Responsibilities and duties are well defined Decisions are significant Effective implementation of company strategies depend on them

14. DISADVANTAGES OF CENTRALIZATION Delay of information passed to sub-ordinates Result in inefficiency  Expectation from all departments will be high No loyalty among department heads Attention toward each department may not be balanced Stress/ Workload/ work pressure is high Decisions may be misunderstood while being passed on to lower position Dispute in division of work may occur

15. COMPARISON STRUCTURE OF CENTRALIZATION AND DECENTRALIZATION DECENTRALIZED APPROACH Bottom-to-top approach CENTRALIZED APPROACH Top-to-bottom approach Level 1 Level 2 Level 3 Level 4 TOP MIDDLE LOW LEVEL OTHERS

16. Decentralization can be viewed as an extension of delegation . Decentralization extends to the lowest level of the organization. Decision making at lower level Limited authority Example: department heads , executive officers, etc… Everything happens in an organization “Decentralization Is The Systematic And Consistent Delegation Of Authority To The Levels Where The Work Is To Be Performed.” - Louis Allen DECENTRALIZATION

17. Decentralized organizations grant decision making authority from the managers to subunits

18. ADVANTAGES OF DECENTRALIZATION Reduce the burden of top manager/top level management Pressure is reduced Helps to maintain proper management in organizing Executive development & Department development is done Work allocation/segregation is done It promotes motivation Everyone gets opportunity Better control & supervision of work is maintained Quick decision making is done

19. DISADVANTAGES OF DECENTRALIZATION Problem in co-ordination Lack of specialization More staffs required Uniform policies are not followed More financial burden Frequent department meeting is required

20. PICTORIAL COMPARISON WORK is SUB DIVIDED to each DEPARTMENTS & SUB-ORDINATES CENTRALIZATION DECENTR

21. TOPIC DISCUSSED Functions of Management – Organizing, staff authority Role of HRM DELEGATION of AUTHORITY – Definition, Reasons, Process, Things Considered, Types, Importance, factors affecting CENTRALIZATION -Definition, Advantages, Disadvantages, Application- Example DECENTRALIZATION -Definition, Advantages, Disadvantages, Application- Example

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