‫اسم الطالب ‪ :‬زيد احمد خليل ابو شنب‬

‫الرقم الجامعي‪11924766:‬‬

‫مدرس المساق ‪ :‬أ‪ .‬فادي نصار‬

‫اسم المساق ‪ :‬االدارة والريادة التمريضية االكلينكي‬

‫التاريخ ‪12/10/2022:‬‬

‫اليوم ‪ :‬االربعاء‬
This article provides a comparative account of the
merits and limitations of centralisation and
decentralisation.

Consistency/Lack of Consistency in Decision-Making:

Centralisation leads to consistency in decision-making;

because decisions are taken by a small group of managers at
upper levels of management.

According, there are lesser problems of coordination. In

decentralisation, there is a lack of consistency in decision-
making; because a large number of managers at lower levels
may decide the same issue in diverse manners – despite
operating within the organisational policy framework.
Accordingly, problems of co-ordination are accentuated.

Strong/Weak Top Management:

Centralisation of authority strengthens top management; and
it is in a position to provide outstanding leadership to the
whole enterprise by virtue of its vast authority. Under
decentralisation, top management is rather weak; as most of
its powers are given away among lower levels of management.
It is not in a position to provide outstanding leadership to the
organisation, because of its reduced powers.

 Lower/Higher Costs of Administration:

In a centralised set-up of the organisation, the cost of
administration is lesser; because the enterprise can operate
with a limited number of managers. This is a good advantage
of centralisation, in the present-day-times characterised by
highly inflationary conditions. In a decentralised set-up, the
cost of administration is higher; because to operate the
decentralised units, a large number of managers is
necessitated.

Broad/Narrow Approach to Managing:

In centralisation, the top management has a broad outlook to
managing; as it takes decisions from the system’s perspective
– viewing the functioning of the organisation as a whole. In
decentralisation, the managers of decentralised units have,
usually, a narrow outlook to managing. For them, their own
departmental interests are supreme – as against the overall
interests of the whole organisation.

Discouraging/Encouraging Inter-Departmental
Conflicts:

Centralisation discourages inter-departmental conflicts;

because major decisions of departments are taken at upper
levels of management with an orientation towards
departmental co-operation.

Decentralisation encourages inter-departmental conflicts;

because different departmental managers take decisions in
their own unique manners and styles, by virtue of, their vast
powers and hell care for departmental co-ordination and co-
operation.

Mature/Risky Decision-Making:
In centralisation, upper management, because of its
experience, wisdom and broad outlook, is more mature in
decision-making. Such decisions carry the chance of being
least risky. In decentralisation, lower level managers, because
of their less experience, wisdom and narrow outlook are less
mature in decision-making.
Sometimes, under decentralisation such risky decisions might
be taken as might endanger the very survival of the business
enterprise.

Retention/Loss of Control by Top Management:

In centralisation, top management retains tight control over
the whole organisation, because of its vast powers. In
decentralisation, top management’s control over the
organisation is loosened; as its substantial powers are passed
on to the lower levels of management.

Optimum/Less than Optimum Utilisation of

Resources:
Under centralisation, there is an optimum utilisation of
organisational resources, because of rational allocation of
scarce resources among different uses. Under decentralisation,
there may be, at times, less than optimum utilisation of
resources; because the same set of activities may be duplicated
in various decentralised units – leading to wastage of precious
organisational resources.

Efficient/Inefficient Handling of Emergencies:

In centralisation, there is an efficient handling of emergencies
by top management; and it can overcome organisational crises
in an intelligent and planned manner. In decentralisation,
lower level management may be frightened by emergencies
and run to seek the shelter and guidance of top management
for handling emergency situations.
Failure to effectively deal with emergencies by lower level
management, may tell upon the survival and prosperity of the
whole enterprise.

(x) Suitable/Unsuitable in the Present-Day

Environmental Scenario:
Centralisation/re-centralisation is highly suitable for tackling
present-day environmental scenario; which is highly volatile
and turbulent. Under these circumstances, top management
can take sound decisions in consultation with specialists, from
various fields.

Present-day environmental scenario makes decentralisation

impractical. For taking sound decisions under these
circumstances, top management cannot provide specialists to
every Tom, Dick or Harry manager at lower levels in the
organisation, because of financial implications.

Comparative Account # Limitations of

Centralisation/Merits of Decentralization:

Following are the limitations of centralisation/ad

vantages of decentralisation:

Heavy Burden/Light Burden on Top Management:

Under centralisation, there is heavy burden of management
work on top management; as it has to do strategic planning,
policy formulation and controlling the whole organisation.
Under decentralisation, there is light burden on top
management; as much of the management work is passed on
to lower levels of management.

Organisational Growth Retarded/Facilitated:

Centralisation retards the growth of organisation. Strategies of
diversification, expansional programmes cannot be practical
for organisation; as top management, already over-burdened
with normal management work, can hardly find time to think
in these directions.

Decentralisation facilities organisational growth. Dynamic and

talented managers at lower levels coupled with power, can
easily conceive of and implement growth strategies, of course,
in consultation with top management. In fact, a trend towards
decentralisation has gained momentum to cope with
requirements of growth.

Lower/Higher Status of Lower Level Managers:

Centralisation decreases the status of lower level managers. As
such, they have less motivation to work, because of the non-
fulfillment of their ego needs. Decentralisation adds to the
status of lower level managers. In fact, everything which goes
to increase the status of lower level managers is a measure of
decentralisation. With enhanced status, lower level managers
have more motivation to work.

Autocratic/Democratic Management:
Centralisation may lead to autocratic management, in the
organisation. Top management with unrestricted powers may
not hesitate to impose its autocratic policies and leadership
styles on the whole organisation i.e. it may misuse its powers
also.

Decentralisation leads to democratic features in organisational

functioning. In fact, under decentralisation, management
decision-making power gets divided among a large number of
lower rank managers. This phenomenon puts restraints over
the dictatorial use of powers by the top management.

Initiative Discouraged/Encouraged:
Centralisation discourages the exercise of initiative on the part
of lower level managers. Their creativity and innovative skills
have no scope, in the organisation. Decentralisation
encourages the exercise of initiative on the part of lower level
managers.

They can think out and execute their innovative plans, for the
overall betterment of organisational life. Their creativity and
innovative skills have full scope in the organisation. That is
why; many decentralised enterprises have progressed a lot, in
some cases.

Delayed/Quick Decision-Making:
In centralisation, there is delayed decision-making; because
top management is burdened with many organisational issues
and cannot pay timely attention to decision-making. In
decentralizations, there is quick decision-making.

For one thing, lower level managers have comparatively

limited managerial work, as they have to attend to only their
own departmental problems. And for another, they need not
seek approval of upper management for decision-making on
issues, for which authority has been decentralised to them.

Inferior/Superior Decision-Making:
Under centralisation there is inferior decision-making by top
management. This may seem paradoxical; but it is true in the
sense that top rank managers are much remote to the
situational factors, in the context of which decisions have to be
made.

Under decentralisation, decision-making is superior, in the

sense that lower level managers are close to the situational
factors, in the context of which decisions have to be made. In
fact, they practically deal with situational factors and develop
a better sense of their appreciation and tackling.

Managerial Development Retarded/Facilitated:

Centralisation retards managerial training and developmental
process. Under this philosophy, lower rank managers have
little chance of development; because their roles in
organisational life are routinized and they have no or little
freedom to exercise initiative and take bold decisions, in an
unrestricted manner.

Centralisation, in a way, creates problems of managerial

succession when some significant top-level managers retire,
due to age factor. Decentralisation, is a systematic way of
training and developing managers for higher managerial
positions. This philosophy more or less does away with the
problem of managerial succession.
Management by Exception Retarded/Facilitated:
Centralisation retards the policy of management by exception,
under which top management must concentrate its attention
only on strategic issues. Hence, under centralisation, this
policy is not possible; as top management has to attend to all
aspects of managing, because of reservation of substantial
decision-making authority with itself.

Decentralisation facilitates the policy of management by

exception. By retaining authority for strategic decision-making
with itself, top management can decentralize substantial
authority for operational management purposes to lower level
managers.

Egoistic/Rational Planning:
Under centralisation, as a matter of great men psychology, top
management, sometimes, may indulge in egoistic planning for
ambitious purposes without caring for the attainment of
enterprise objectives. Under decentralisation, rational
planning is done by lower level managers.

They have comparatively little ambition and ego and care

more for attainment of their departmental objectives through
designing and implementing rational plans.