Asked by: Xiaobin Kenning
business and finance business administration

What is a centralized organizational structure?

Last Updated: 27th January, 2020

Centralized organization can be defined as a hierarchy decision-making structure where all decisions and processes are handled strictly at the top or the executive level. Policies are put in place to ensure the rest of the company follows the direction of the executives.

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In this way, what is an example of a centralized organization?

Companies with centralized structure concentrate their authority in upper levels of management. For example, the military has a centralized organization structure. This is because the higher ups order those below them and everybody must follow those orders.

what are the advantages of a centralized organizational structure? Centralization Supports Focused Vision A company president or executive team can establish and communicate its vision or strategy to employees and keep all levels moving in the same direction. This prevents potential inconsistency in vision and helps companies deliver a common message to customers and communities.

what is centralized and decentralized organizational structure?

Centralized organizational structures rely on one individual to make decisions and provide direction for the company. Decentralized organizations rely on a team environment at different levels in the business. Individuals at each level in the business may have some autonomy to make business decisions.

What is Centralised management?

Centralized management is the organizational structure where a small handful of individuals make most of the decisions in a company. As a company with centralized management grows, they add new levels of mid and lower level managers, each of whom answers to a superior, with very strictly defined roles in the company.

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What are the types of centralization?

There are three types of centralization that are departmental centralization, centralization of performance and centralization of management. It is a rule under which the power is deputed to the lower level management.

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What is a centralized model?

A centralized model basically consists of management overseeing the design, development and implementation of the entire program and then passing the results to individual departments. The departments would then be responsible for monitoring the effectiveness of the program and relaying any results back to management.

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What are the advantages of decentralization?

Advantages of decentralization include better, more timely decisions and increased motivation. Since it also eases the burden on top management, there is less management firefighting, or day-to-day problem solving. It also facilitates diversification and the development of junior management.

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What do you mean by centralization?

Centralisation refers to the hierarchical level within an organisation that has authority to make decisions. When decision making is kept at the top level, the organisation is centralised; when it is delegated to lower organisational levels, it is decentralised (Daft, 2010: 17).

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What do you mean by Organisational structure?

The typically hierarchical arrangement of lines of authority, communications, rights and duties of an organization. Organizational structure determines how the roles, power and responsibilities are assigned, controlled, and coordinated, and how information flows between the different levels of management.

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Which is an advantage of a matrix organization?

Advantages of Matrix Structures
Because matrix structures retain an organization's functional structure, they allow for the rapid creation of efficient large-scale, project structures that employ many members of the organization's functional structure but without disrupting or destroying the structure in the process.

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What are the disadvantages of a centralized organizational structure?

On the downside, the centralized model does have some disadvantages. From an organizational standpoint, centralization can carry risks such as bottlenecks caused by increased layers of approvals and slower decision making. A significant disadvantage of centralized production is the inflexibility to customize.

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What is centralized decision making?

Centralized organization can be defined as a hierarchy decision-making structure where all decisions and processes are handled strictly at the top or the executive level. Policies are put in place to ensure the rest of the company follows the direction of the executives.

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What is centralization vs decentralization?

Centralization can be also analyzed from the macroeconomic perspective. Centralized state, is the state, which can ensure uniformity of policy within its borders, but which ignores the specify needs of individual regions. Decentralization relates to a transfer of power from a high level of government to a lower one.

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What is a flat Organisational structure?

Flat Organizational Structure
A flat organization refers to an organization structure with few or no levels of management between management and staff level employees. The flat organization supervises employees less while promoting their increased involvement in the decision-making process.

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What do you mean by centralization and decentralization?

Centralization of authority means the power of planning and decision making are exclusively in the hands of top management. On the other hand, Decentralization refers to the dissemination of powers by the top management to the middle or low-level management.

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Is Apple a centralized or decentralized company?

Apple is an example of a type of centralized organization. However, as we know about the recent criticisms of Apple, after Steve jobs, the organization is not as charismatic and the main reason for that is the centralized decision making. Thus, a business when it gets bigger, should have a decentralized approach.

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What are the features of centralized management?

Features of centralisation in management
Top level managers concentrate and reserve the decision-making power. Execution decided by the top level management with the help from the other levels of management.

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What are the types of organizational structure?

There are three main types of organizational structure: functional structure, divisional structure and a blend of the two, called matrix structure.

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What is a disadvantage of decentralization?

Disadvantages of a Decentralized Organization
The main disadvantage of a decentralized organization is that you lose control over the day-to-day activities of your company. Maybe “lose” is too strong a word, but you are ceding authority to your managers, which means that you trust their instincts, skills, and talents.

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What are the bases of centralization of an organization?

Centralization refers to a setup in which the decision-making powers are concentrated in a few leaders at the top of the organizational structure. Decisions are made at the top and communicated to lower-level managers for implementation.

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How does centralization and decentralization affects inventory management?

With centralization, a company elects to keep its entire inventory in one, or it opts to utilize few major hubs that focuses on a large region. Decentralization on the other hand utilizes numerous warehouses that would concentrate on smaller geographic areas, and would be much smaller than a centralized warehouse.

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What are the disadvantages of centralization of authority?

Disadvantages include the tendency to stifle innovation and creativity, making it hard for an organization to adjust to change. Centralized authority may also decrease job satisfaction and organizational commitment in low level employees.

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Why do we centralize a function?

In a centralized organization, departments or groups within a company typically adhere to a single unified set of rules and procedures. This streamlines processes and functions, which in turn reduces costs, saves time and improves efficiency for the company.