Continuing from our last blog on centralization where begun questioning the common understanding of centralization, we discuss a few more questions here and finally define centralization.
A couple of blogs earlier, we had discussed and defined the concept of procedures/policies etc? It would be interesting to relate these with centralization and ask the question - "Can policies override decentralization?" Generally, the decision making at the first level of workers is directed by a policy which provides a guideline towards making decisions. So given that these policies is it real decentralization?
As we defined centralization we said it would stand for "concentration at a single point" - does this single point mean - a single person, or a unit, or a level? For the operational employees it wouldn’t matter at what level the decision is being made - is it one level above them of some 5 levels above them!
Will having an information processing system closely monitor the decentralization amount to centralization of control?
If the operational level workers are able to control information does this result in decentralization if the process is actually centralized decision making?
Taking all these into considerations, we can now define centralization as - "the degree to which the formal authority to make discretionary choices is concentrated in an individual, unit or level (usually high in the organization), thus permitting employees lower in the organization minimum input into the work."
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