Centralization, decentralization & formalization

Basic Management Topics and stuff....

1. Centralization Prepared by, Malay m. patel Management -1

2. 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. Keep in mind that centralization is relative, not absolute- that is, an organization is never completely centralized. CENTRALIZATION

3. More Centralization Environment is stable. Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have a say in decisions. Decisions are relatively minor. Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depends on managers retaining say over what happens.

4. Decentralization

5. A decentralized organization is one in which decision making is not confined to a few top executives but rather is throughout the organization, with managers at various levels making key operating decisions relating to their sphere of responsibility. Definition of Decentralization

6. More Decentralization Environment is complex, uncertain. Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are significant. Corporate culture is open to allowing managers to have a say in what happens. Company is geographically dispersed. Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions.

7. Today’s View :- As organization have become more flexible and responsive to environmental trades, there’s been a distinct shift towards decentralization decision making. This is also known as employee empowerment, which is giving employees more authority to make a decision.

8. Formalization

9. Content What is Formalization ? Advantages & Disadvantages Today’s view about it

10. Elements of Organizational Structure What is Formalization ? Formalization is the extent to which rules and procedures are followed in an organization . The degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms. Span of Control Centralization Departmentalization Formalization

11. Advantages :- Formalization makes the process of succession routine. In crease the rationality of organization. Make explicit and visible the structure of relationships among organizational participants.

12. Disadvantages :- Employee s are not allowed to exercise their own judgment. Discrimination of work load between employees. F ormal structures are the norms and behaviours that exist regardless of individuals involvement.

13. Today’s view about Formalization :- Although some formalization is necessary for consistency and control, many organizations today rely less on strict rules and standardization to guide and regulate employee behavior.

14. Thank You