Decentralisation is an important concept that has been a topic of hot debate in the last few decades. It applies to all organizations and even governments and pertains to devolution of power from the top to the bottom, grass root levels. Centralisation is just the opposite of decentralisation as it proposes a strong centre taking away all powers from down the levels. There are many more differences between centralisation and decentralisation that will be harped upon in this article.
There are organizations that are highly centralized and the decision making power remains in the hands of a chosen few. Right from planning and implementation of strategies, all major decisions are taken by the topmost levels of management and enforced upon employees at lower levels. Though in terms of governance, this is one system that is away from the aspirations and hopes of common people, yet remains in place in countries with dictators and despots. It is in democracies that we see the concept of decentralization where there is a conscious effort to devolve power and authority down to lower levels. This helps in governance at local level that is sensitive to the needs and aspirations of the people.
At the level of an organization, decentralization refers to a situation where power is distributed at different levels and the power structure takes the shape of a pyramid where power devolves from the top and reaches down to the lowest levels of the structure. This type of a structure is helpful especially because organizations are growing bigger than ever and decisions can be taken at lower levels that help in more efficient running of an organization. Because of lot many decisions being taken at lower levels, much time is saved and improvements that are not possible in a highly centralized structure can be easily effected. Thus decentralized structure is a bottom to top approach as against a centralized structure which is a top to bottom approach. In a decentralized structure, employees do not have to wait for orders from top and can tackle exigencies on their own thus resulting in better efficiency and productivity.
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In brief: Centralisation and Decentralisation • Centralization and decentralization are important concepts in devolution of powers and authority in an organization • Highly centralized structure refers to an organization where decision making powers are in the hands of remaining few at the top and the structure is called a top to bottom approach • Decentralized structure is one which adopts a bottom to top approach and allows devolution of powers at lower levels. • Decentralized structures are seen as a necessity in today’s context with bigger and bigger corporations coming into existence. • Centralization and decentralization are important concepts used in many other fields too.
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