Cenralistaion vs Decentalisation

The main ends argon do by old management, where little indorsement is passed down the organisation. advantages decisions are made by experienced people with an overview of the company. ensures policies are consistent passim the company. ensures quick decisions can be made without consultation. procedures such(prenominal) as ordering and purchasing can be standardised throughout the company, leading to economies of scale. in times of crisis the firm may need whole leadership by a central group of senior managers. disadvantages (mainly advantages of decentralisation) centralisation reduces the input of the day to day experts, e. g. , the shop floor staff, into the firms decision making. it risks demoralising branch managers who may feel mistrusted or powerless. Decentralisation Decisions are made by young management as authority is passed down the organisation, thereby accepting less congruity in how things are down. There has been a trend in the 1980s and 1990s is to d ecentralise to provide greater tractability. advantages reduces the stress and burdens of senior management it can empower local managers encouraging them to be more innovated and motivated. it reduces the volume of day to day communication between head office and the branches, therefore giving senior managers the time to exact long term strategy. subordinates may have a better companionship of local conditions affecting their areas of travel.This should allow them to make more informed soundly 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 wedded 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 leave be quicker. Since decisions are quicker, they are easier to change in th e light of unforeseen circumstances. disadvantages reduction in uniformity may unsettle customers who expect every Sainsburys to look the equivalent or for every McDonalds hamburger to contain just unmatchable slice of gherkin. head office is in a position to barroom the success of every aspect of the product and sales mix, therefore its book of instructions may prove more profitable than local managers intuition.Conclusion It is unlikely there will ever be cease 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 responsibility.