Content: I: Objectives of The Report

Name of the Reporter: Paladan, Mary Joy M.
Reporter Number: 14
Course Code: SSE-102
Topic: Centralization and Decentralization
Content:
I: Objectives of the Report
 To share information about centralization and decentralization and

their implications;
 To determine the difference of centralization and decentralization;
 To determine the importance of centralization and decentralization
and the implication to education; and
 To determine the advantages and disadvantages of centralization and
decentralization
II. INTRODUCTION
What is organization structure all about? Assuming that we are the team
members of a specific company having a new promoted CEO. Just as we looked to
our team members to decide how to motivate them and make them more productive,
we began to study organizational structure to determine how that had an influence.
Organizational structure brings together Taylor’s ideas of work specialization, Fayol’s
ideas of chain of command, and Weber’s bureaucracy to add to the productivity and
efficiency of business.
Organizational structure defines how job tasks are formally divided, grouped,
and coordinated. The structure of an organization usually features six different
elements such as, work specialization, departmentalization, chain of command, span
of control, and centralization and decentralization. However, one of the fundamental
problems of organization is to decide how much authority should be centralized in
the hands of the Chief Executive and how much should be distributed among the
lower level management and what should be the right degree of centralization or
decentralization. Complete centralization is possible only in a one-man enterprise.
But the moment its scope is enlarged, decentralization becomes inevitable.
This paper will tackle about the importance of centralization and
decentralization in organizing management, the difference of these two elements, the
implication of these in education, and the disadvantages and advantages of these two
elements of structure of organization.
III. Content/Discussion
Centralization
Centralization means concentration of power of decision-making.

Concentration is the systematic and consistent reservation of authority in the central
hands in the organization. Furthermore, Centralization refers to the process in which
activities involving planning and decision-making within an organization.
Its implications are:
 Decision-making power in regard to planning, organization, coordination and

control is reserved in the hands of the top executive
 Operating authority is reserved with the middle level managers; and
 Operations at lower levels are subservient to command, consent and control
by the higher level authority in time.
Decentralization
On the other hand, decentralization means delegation of business decisions by
the owners to their subordinates, and then the others further down in the
management hierarchy. Moreover, decentralization in business is when daily
operations and decision-making power are delegated by top management to middle-
and lower-level managers — and sometimes even team members.
Its implications are:
 In decentralization, concern diversification of activities can place effectively
since there is more scope for creating new departments.
 Employees at the lowest level will become more proactive with their task and
they may feel that they are important to the company because of their
participation in planning, brainstorming, and other activities or entire
business operation.
 Decentralization for human resources for health is greatly influenced by the

degree to which political and/or administrative power is.
Centralization vs. Decentralization
 If decision-making power is centralized in the hands of a single individual, the

organization is fully centralized; but when the power of decision-making is
widely scattered throughout the organization, it is a decentralized set-up.
 Centralization procedures, uniformity of policy and action utilize the skills of

centralized and specialized staff and enable closer control over operating units.
Decentralization, on the other hand, tends to effect faster decision-making and
action on the spot without consulting the higher level; and creates a tendency
towards greater interest and enthusiasm on the part of subordinates.
 Centralized organizational structures rely on one individual to make decisions

and provide direction for the company. Small businesses often use this
structure since the owner is responsible for the company’s business
operations. Decentralized organizations rely on a team environment at
different levels in the business. Individuals at each level in the business may
have some autonomy to make business decisions.
Importance of Centralization and Decentralization in Organizing

Management
These are the Importance of centralization are the following: Achieving the
uniformity of action, facilitating integration, promoting personal leadership, and
handling emergencies. While, the importance of decentralization are: relieves top
management of some burden of decision making, gives managers more freedom and
independence in decision making, promotes the development of general managers,
encourages the assumption of authority and responsibility, makes comparison of the
performance of different organizational units possible, facilitates product
diversification, and aids in adaptation to a fast-changing environment.
Advantages and Disadvantages of Centralization and Decentralization
Centralization Advantages:
 Standardization of Procedures and Systems
 Facilities Evaluation
 will bring in economies of large scale
 Co-ordination of activities of various segments is also facilitated
 ensures coordination among all the subordinates
 Uniformity in Action
Disadvantages of Centralization:
 Destroys Individual Initiative

 Over Burden of Few
 Operations of the enterprise are slowed down under centralized set-up
 Distance from Customers
 does not offer any scope for specialization
Decentralization Advantages:
 Top management can concentrate on bigger issues such as overall strategy.

 Empowering lower-level managers to make decisions puts the decision-
making authority in the hands of those who tend to have the most detailed
and up-to-date information about day-to-day operations.
 By eliminating layers of decision making and approvals, organizations can
respond more quickly to customers and changes in the operating
environment.
 Granting decision-making authority helps train lower-level managers for
higher-level positions.
 Empowering lower-level managers to make decisions can increase their
motivation and job satisfaction.
Decentralization Disadvantages:
 Decentralization puts increased pressure on divisional heads to realize profits

at any cost.
 Decentralization results in a duplication of staff effort.
 Freedom of action may lead to diversity of decisions.
 Emergency Decision not Possible
 Lack of Qualified Managers
IV. Implication to Education
Over the last few decades decentralization of school management has occurred in
most education systems around the globe. If implemented well, decentralization has the
potential to improve education quality and learning outcomes. For the implication of this
topic to education, decentralization is much more used than centralization in terms of
education learning outcomes.
Decentralization within education requires careful considerations of which
elements of the system to decentralize and to what local level. There is still
insufficient evidence to draw conclusions about the direct and indirect relationship
between decentralization and learning outcomes and the decentralization of resource
mobilization and allocation leads to especially mixed effects.
Research suggests that decentralization of administrative functions to school-
based management can result in greater empowerment and collaboration among
teachers, a greater school-wide focus on professional development, and a greater
sense of accountability. Decentralization of curriculum development rests on the
belief that it will give more room for local variance and relevance, potentially leading
to more motivated students and a better culture of learning. The major factors
determining the effects of any form of decentralization are whether local educators
are equipped with skills, knowledge and attitudes to accomplish the task, and
whether upper-level authorities supply the support they need.
(https://learningportal.iiep.unesco.org.decentralization-of-education-
management)
V. SUMMARY
Centralization means concentration of power of decision-making.

Concentration is the systematic and consistent reservation of authority in the central
hands in the organization. While, operations and decision-making power are
delegated by top management to middle-and lower-level managers — and sometimes
even team members. These two elements of organizing structure differ in many ways
such as in decision-making and the relationship with the management and the team
members. Their basic difference is that, centralization in an organization involves
decision-making capability in the hands of top management while, decentralization
in an organization involves decision-making capability through middle management
or lower management.
However, they have advantages and disadvantages but somehow, these two
elements of organizing structure gives a big positive impact on business or
economics, education, political, and environmental organization management. The
implications to education of decentralization can result in greater empowerment and
collaboration among teachers, a greater school-wide focus on professional
development, and a greater sense of accountability.
Therefore, to sum it up, centralization and decentralization has a great impact
and help a lot of management either small or a big management such as quick
implementation of decisions and improved quality of work.
VI. REFERENCES
Online Sources:
https://i2.wp.com/www.iedunote.com
https://www.economicsdiscussion.net/management/advantages-and-
disadvantages-of-decentralization/31848
https://www.yourarticlelibrary.com/organization/centralization/centralization-
factors-advantages-and-disadvantages/53276
https://corporatefinanceinstitute.com/resources/knowledge/strategy/centralizatio
n/
https://theinvestorsbook.com/centralization.html
https://smallbusiness.chron.com/organizational-structure-guidelines-843.html
https://i2.wp.com/www.iedunote.com/img/1382/centralization-to-complete-
decentralization.jpg?resize=1280%2C667&quality=100&ssl=1
https://granite.pressbooks.pub/mgmt805/chapter/organizational-structures-and-
their-history/
https://www.ciesin.columbia.edu/decentralization/English/General/history_fao.h
tml

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Name of the Reporter: Paladan, Mary Joy M.

Course Code: SSE-102

Topic: Centralization and Decentralization

I: Objectives of the Report

 To share information about centralization and decentralization and

Centralization means concentration of power of decision-making.

 Decision-making power in regard to planning, organization, coordination and

 Decentralization for human resources for health is greatly influenced by the

 If decision-making power is centralized in the hands of a single individual, the

 Centralization procedures, uniformity of policy and action utilize the skills of

 Centralized organizational structures rely on one individual to make decisions

Importance of Centralization and Decentralization in Organizing

Advantages and Disadvantages of Centralization and Decentralization

 Standardization of Procedures and Systems

 Destroys Individual Initiative

 Top management can concentrate on bigger issues such as overall strategy.

 Decentralization puts increased pressure on divisional heads to realize profits

IV. Implication to Education

Centralization means concentration of power of decision-making.

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