4/16/2023 0 Comments Disadvantage of cpusim![]() Lower-level employees have to obey the rules made by the higher management organization without doubting the rules and regulations.ĭecentralization is an organizational structure where the delegates are assigned to manage the organization. In centralization, the type of organizational structure allows higher management to create the rules including procedures that are used to communicate with lower-level employees. It also clarifies the motives and mission of the organization, which must follow to achieve its goals. Few selected members are given the authority to create and determine strategies and goals. So, let us now understand what the terms centralization and decentralization mean in the coming section.Ĭentralization is an organizational structure that gives the ability of decision-making responsibilities to higher management. As they both help us determine the fiscal situation of a firm or country. Only then, you can fully understand the merits and demerits of Centralization and Decentralization. Decentralization means that decision-making is delegated to the lower levels of the organization.īefore heading onto the advantages and disadvantages of Centralization and Decentralization, one needs to understand properly, what do the terms- Centralization and Decentralization are. There is a hierarchy of formal authority in centralization for making all the organization's important decisions. In any organization, there are two ways of operation: centralization and decentralization.
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