Centralization
Centralization refers to that organizational structure where decision-making power is confined to the top management, and the subordinates need to follow the instructions of their seniors.
Centralization of authority is essential for small-scale organizations which lack resources and finance. A centralized business can be led by a single leader, a small group of people, or a department that controls the decisions for the entire company [The Investors Book].
Companies can implement a few different types of centralization within their management. These types include:
-Departmental centralization: This type of centralization is based on different departments within an organization. Each department has a head office or leader who makes the decisions for that department.
-Management centralization: This is the most common type of centralization. Management centralization is when one person or department makes all decisions for an entire organization.
-Geographic centralization: This type of centralization is often seen in larger companies with locations in various areas. Each location has its leader or group of leaders who make decisions for that location [Indeed].
What Is Centralization? Definition, Factors, Advantages, Disadvantages. The Investors Book. Retrieved from: https://theinvestorsbook.com/centralization.html
Centralization: Pros and Cons for Small Businesses. Indeed. Retrieved from: https://www.indeed.com/%D1%80%D0%B0%D0%B1%D0%BE%D1%82%D0%BE%D0%B4%D0%B0%D1%82%D0%B5%D0%BB%D1%8C/c/info/define-centralization#1