Question

(vi) what are the characteristics of centralized and decentralized information system?

Answer 1

ADVANTAGES OF CENTRALIZATION

1.       Specialization management: The higher the specialization of jobs, the greater the need for centralization. Tall hierarchical organizations with functional departments are best managed through centralization.

2.       Complexity management: Specialization of jobs creates complexity. Narrow spans of management also create complexity. Centralization provides advantage to manage complexity. Uniform policies and practices are fostered. Specialists can be used.

3.       Significant decision making: Non-programmed significant decisions require centralized decision making by top management. Decentralization is not suitable for making such decisions. Moreover, management philosophy may also favor centralization in such decision.

4.       Environmental stability: Centralization is the most suitable model for making decisions in stable environment.

5.       Improved capacity at lower levels: Subordinates may lack capacity or be unwilling and inexperienced to exercise decentralized authority. Such situations give advantage to centralization.

6.       Crisis management: When organizations face crisis or risk of failure, centralized decision making by top management has advantage.

7.       Cost effective: High cost of decentralization makes centralization advantageous. Duplication of efforts is minimized.

ADVANTAGES OF DECENTRALIZATION

1.       Quicker and better decisions: it disperses decision making authority close to unit managers who execute decisions. It reduces problems of communication and red tape. This leads to quicker and better decision making

2.       Diversification: decentralization facilitates diversification of products, activities and markets. Profit centers can be established with independence in decision making.

3.       Competitive organizational climate: Decentralization promotes competitive climate for improving performance among divisions and profit centers.

4.       Management development: decentralization encourages managers to exercise freedom and independence in decision making. They learn to make decisions and exercise judgment. This develops managerial competency.

5.       Environmental adaptation: Decentralization helps organizations to adapt to fast-changing environment.

6.       Relieves burden of top management: Top managers are relieved from making routine decisions. They can concentrate on important issues of strategic relevance.

7.       Higher motivation and morale: Decentralization provides power, prestige and status to subordinates. This increases motivation and morale of subordinates.

Answer 2

⏺ centralized. ⏺

1. ⚪The retention of powers and authority with respect to planning and decisions, with the top management, is known as Centralization.⚪



2. ⚪Systematic and consistent reservation of authority.⚪



3. Communication Flow is ⚪Vertical ⚪




4. Power of decision making ⚪Lies with the top management ⚪






➖➖➖➖➖➖➖➖➖


DECENTRALIZATION



➖➖➖➖➖➖➖➖➖






1. The dissemination of authority, responsibility and accountability to the various management levels, is known as Decentralization.




2. Systematic dispersal of authority



3. communication flow is open and free .



4. Power of decision making Multiple persons have the power of decision making.