Centralization and Decentralization

Centralization refers to an organizational structure where decision-making authority is concentrated at the top levels of management. This often leads to uniform policies but can slow down responses to local issues. In contrast, decentralization distributes decision-making power closer to the operational level, allowing teams to respond quickly and adapt to specific circumstances. While centralization provides consistency and control, decentralization fosters innovation and flexibility. The choice between the two impacts not only how a company is organized but also its culture, influencing how employees collaborate and engage with their roles.