In centralization, authority and power is retained at the top level management. It has some benefits such as quick decision making process, simple and economical, better control and supervision etc. It also suffers from some drawbacks such as lack of specialization, workload to the top authority, possibility of misuse of power etc. This post highlights pros and cons of centralization in detail.
Benefits Or Advantages Of Centralization
The main advantages of centralization can be highlighted as follows:
1. Simplicity
Centralization means reservation of authority and power at the managerial level. It is very simple and clear process that every member can easily understand their roles and duties.
5. Uniformity
2. Prompt Decision
Prompt decision is another benefit of centralization. A single manager can take decisions without consulting others that makes decision making process very quick. Prompt decision making is useful for emergency situation.
3. Economy
Entire organizational activities are supervised and controlled by few managers. It helps to reduce operational overheads.
4. Suitability
It is simple and less costly method. So, it is suitable or appropriate for small organizations with few operational activity where a single manager can control the activities and employees.
In centralization, uniformity in performance is possible because of clearly defined role and direct control of superior.
6. Better Control
Centralization facilitates proper supervision which helps to maintain strict discipline at the workplace. Proper supervision and strict discipline helps to maintain better control.
Drawbacks Or Disadvantages Of Centralization
The main disadvantages of centralization can be highlighted as follows:
1. Inappropriate
Centralization is not practical in large firms with several units, departments and various activities. Only top level management cannot control large firms.
2. Over Burden
It is very difficult for the top management to direct, supervise and control overall organizational activities. So, manager remains over burdened and may not have enough time to solve other important issues.
3. Misuse Of Power
Because of bureaucratic leadership there is a high chance of dictatorship and misuse of power by the management.
Also Read:
Also Read:
4. Lack Of Specialization
One manager handles all the activities in the organization. So, there is no scope of specialization in centralization.
5. Low Employee Morale
In centralization, authority and responsibility is retained with the top management. Middle and operating level managers and subordinates should follow the instructions and guidance of central authority. It may reduce the morale of employees which leads to decrease in their performance.
