Centralization

Centralization refers to the process of concentrating power, control, and decision-making authority in a single, central authority or location. In a centralized organizational structure, decisions are made by a small group of leaders at the top of the hierarchy, and lower-level employees have limited autonomy and authority to make decisions on their own.

Centralization can have both advantages and disadvantages. On one hand, centralization can improve coordination and communication within an organization, as decisions are made by a unified leadership team. It can also help ensure consistency in decision-making and policy implementation. However, centralization can also lead to bottlenecks in decision-making, slow response times to changing circumstances, and limited innovation and creativity from lower-level employees.

Many organizations today are seeking to strike a balance between centralization and decentralization, allowing for some degree of autonomy and decision-making authority at lower levels while still maintaining overall control and coordination from a central authority.