Explain what centralization and decentralization of authority mean. Would you rather be a manager in a centralized or a decentralized organization? Why?
What will be an ideal response?
The student should define both terms and then give a logical explanation of their preference.
With centralized authority, important decisions are made by higher-level managers; while with decentralized authority, important decisions are made by middle-and supervisory-level managers.
An advantage in using centralized authority is that there is less duplication of work, because fewer employees perform the same task; rather, the task is often performed by a department of specialists. Another advantage of centralization is that procedures are uniform and thus easier to control; all purchasing, for example, may have to be put out to competitive bids.
An advantage in having decentralized authority is that managers are encouraged to solve their own problems rather than to buck the decision to a higher level. In addition, decisions are made more quickly, which increases the organization's flexibility and efficiency.
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