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What are the circumstances when centralization is better than decentralization?
Wiki User
∙ 9y ago
There are many circumstances where centralization is much better than decentralization. This is the case when housing people very efficiently.
Wiki User
∙ 9y ago
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In general terms, any "de facto" decentralization is an increase in freedom and initiative (and, at the same time, responsibility) for private businesses and individuals that is not the result of any governmental decision or policy. The increase is "a matter of fact" (as signified by the Latin words, "de facto") rather than formally decided up and worked towards.
What is the difference between centralization and decentralization?
The difference between a centralized and a decentralized system of organization is that in a centralized structure all the decision making and authority are focused on the top tier of management. These few people are the ones that dictate company policy and make all the crucial decisions. A decentralized system, on the other hand, delegates authority throughout the organization and to all levels of management. Very often the methods used will depend on a variety of influences such as the size of the company and if it is scattered in a variety of places rather than all under one roof. In a huge organization with many diversifications, like General Motors, for example, there is more likely to be evidence of a decentralized system because it would be impossible and impractical for only a handful of people to ensure that every aspect of the operation was covered. Advantages of centralization include an organization's ability to be able to keep a tight grip on all aspects of the business. In a smaller business where centralization is possible, there is less chance that employees will be unaware of what is expected and what the common goals are because there is such a tight grip on all aspects of the organization from management. An advantage of decentralization is that there tends to be faster decision making and an ability to adapt to the demographic area of production. It also means that lower level managers have the opportunity to gain valuable experience and develop more fully because there is more room to grow.
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We look at other people's lives and think that they are always 'doing better than we are'. Other peoples circumstances always seen to be more desirable than one's own
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