Question

What is centralization? What are the factors influencing centralization and decentralization?
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Answer 1

Answer:

Factors affecting centralisation and decentralisation. Centralisation • “Centralization is the systematic and consistent reservation of authority at central points within an organization”. - Louis A. Allen • Control and decision-making reside at the top level of management.

Answer 2

Centralisation or centralization (see spelling differences) is the process by which the activities of an organisation, particularly those regarding planning and decision-making, framing strategy and policies become concentrated within a particular geographical location group.

Some important factors determining decentralization are:

• The size and complexity of the organization.
• Dispersal of operations.
• Degree of diversification.
• Availability of competent personnel.
• The outlook of the top management.
• Nature of functions of the organization.
• Communication system.
• Planning and control procedures.