chapter 3c - centralization and decentralization

-When decision making tends to be concentrated, centralization is present.-When decision making tends to be dispersed, decentralization is present.

-A business that adopts a policy of placing major decision making authority and control in the hands of a few top level executives.

PRESIDENT

WESTERN DISTRICT MANAGER

SOUTHERN DISRTICT MANAGER

EASTERN DISTRICT MANAGER

PRODUCTION SALES

CENTRALIZED ORGANIZATION STRUCTURE

-A decentralized organization

structure stresses delegation of decision making and lightens the load of top managers.

PRESIDENT

WESTERN REGIONAL DISTRICT MANAGER

SOUTHERN REGIONAL DISTRICT MANAGER

EASTERN REGIONAL DISTRICT MANAGER

PRODUCTION SALES PRODUCTION SALESS PRODUCTION SALES

DECENTRALIZED ORGANIZATION STRUCTURE

-Duplication of functions is minimized.-High qualified specialists can be utilized.-Decision making is concentrated.

-It lightens the load of top managers.-Intimate personal ties and relationships are promoted.-Efficiency is increased.