Centralization vs. Decentralisation

Difference Between Centralization and Decentralisation

Decentralization is an important concept that has been a hot topic of discussion since past few decades. It is applicable to all organizations and even governments and refers to the transfer of power from top to bottom, the grass root levels. Centralization is exactly opposite to decentralization as it offers a strong center controlling all the powers of lower levels. There are many more differences between centralization and decentralization to be harped on in this article.

There are organizations that are highly centralized power and decision-making remains in the hands of a chosen few. Direct the planning and implementation of strategies, all important decisions are taken by the highest levels of administration and enforced on employees at lower levels. Although from the perspective of government, it is a system that is far from the aspirations and hopes of common people, it is still in place in countries ruled by despots and dictators. It is in the democracies that we see the concept of decentralization. It is a conscious effort to devolve authority and power to lower levels. The arrangement helps the government at a local level that is responsive to the needs and aspirations of people.

AT the level of an organization, decentralization refers to a situation where power is distributed to different levels and the power structure is in the form of a pyramid in which power generates from the top and comes down to the lowest levels of the structure. This type of structure is particularly useful because the organizations become larger than ever and decisions can be made at lower levels that help in running an organization more effectively. Since many decisions are made at lower levels, a lot of time gets saved and the improvements are not possible in a highly centralized structure can easily be made. The decentralized structure is therefore a bottom to top approach unlike centralized structure which is a top to bottom. In decentralized structures, employees do not wait for orders from the top and can address the requirements on their own and result in a more efficient and productive result.


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