Moreover, decentralization is a matter of degree, seeing that all companies are decentralized to some extent out of requirement. At one particular extreme, a strongly decentralized organization is one in which usually even the lowest-level managers and employees are empowered to make decisions.
At the various other extreme, in a strongly decentralized organization, lower-level managers include little freedom to make decisions. On the other hand, in a centralized organization, the decisions are manufactured by leading executives or on the basis of pre-set policies. These decisions or policies will be then enforced through a lot of tiers in the organization following gradually broadening the duration of control until it reaches the bottom rate. Centralization is said to be a process in which the concentration of decision making is a few hands.
All the significant decision and actions with the lower level, most subjects and actions at the lower level happen to be subject to the approval of top management. In respect to Ruben R. Schermerhorn(2002), Centralization is the systematic and consistent booking of authority at central points in the organization. The difference between a centralized and a decentralized system of corporation is that in a centralized structure all the decision making and specialist are focused on the top tier of management. These types of few people are the ones that dictate organization policy and make all of the crucial decisions. A decentralized system, on the other hand, delegates expert throughout the corporation and to almost all levels of management.
Advantages of centralization include an organization’s ability to be able to retain a tight proper grip on all aspects of the business enterprise.