Cenralistaion vs Decentalisation

The main endings argon make by major(postnominal) management, where little allowance is passed down the organisation. advantages decisions atomic number 18 made by experienced people with an overview of the company. ensures policies ar consistent end-to-end the company. ensures quick decisions can be made without consultation. procedures such as ordering and purchasing can be standardised throughout the company, leading to economies of scale. in times of crisis the firm may need beardown(prenominal) leadership by a central group of senior managers. disadvantages (mainly advantages of de centralization) centralisation reduces the input of the day to day experts, e. g. , the shop floor staff, into the firms decision making. it risks pervert branch managers who may feel mistrusted or powerless. Decentralisation Decisions are made by lowly management as authority is passed down the organisation, thereby accepting less amity in how things are down. There has been a trend i n the 1980s and 1990s is to decentralise to provide great flexibility. advantages reduces the stress and burdens of senior management it can empower local managers back up them to be more innovated and motivated. it reduces the volume of day to day communication amid head office and the branches, therefore giving senior managers the time to escort long term strategy. subordinates may have a better fellowship of local conditions affecting their areas of bet.This should allow them to make more informed hygienic judged choices, e. g. , salespersons have detailed knowledge of customers. management at middle and junior levels are groomed to take over higher positions. They are presumption the experience of decision making when carrying out delegated tasks (management development). could allow greater flexibility and a quicker response to changes. If problems do not have to referred to senior management decision making provide be quicker. Since decisions are quicker, they ar e easier to change in the light of unforeseen circumstances. disadvantages reduction in uniformity may unsettle customers who expect every Sainsburys to look the akin or for every McDonalds hamburger to contain just one slice of gherkin. head office is in a position to round the success of every aspect of the product and sales mix, therefore its instruction manual may prove more profitable than local managers intuition.Conclusion It is unlikely there will ever be accomplish centralisation or decentralisation. Certain functions within a business will always be centralised because of their importance, e. g. , decisions about budget allocation are likely to be centralised as they affect the whole economy. The decision to distribute profits is also taken only by a few. Some delegation is necessary in all firms because the limits to the amount of work senior management can carry out. Even if authority is delegated to a subordinate it is usual for the manager to retain responsibili ty.