Centralization is the action and effect of centralizing . This verb, on the other hand, refers to gather several things in a center common or to make different things depend on a central power .
To understand the concept of centralization, therefore, we must pay attention to the notions of center and central . Center, from Latin centrum, can refer to the interior point equidistant from the limits of a figure , to the place where coordinate actions converge, to the region that concentrates the most crowded points of a population, to the area where there is more bureaucratic or commercial activity and to the place where people meet with a common purpose.
Central is that relative or belonging to the center. The central can be something that is in the physical center, the place that is between two extremes or that which is the basic or essential of something.
Taking up the idea of centralization, it can be said that it is the action or initiative to gather different things in a common center . A company You can decide on the centralization of the telephone calls you receive and have them enter the same device so that a person in charge of the reception will then attend and derive as appropriate. From this point of convergence, calls are redirected to their respective recipients; If these are not available, this type of organization allows you to leave a message so that the contact attempt is recorded.
The centralization of power On the other hand, it is linked to the national or federal government that assumes the powers attributed to local organizations. This means that all decisions come from the same center (the national government), so that the authorities of the provinces, cities, towns, etc. They lose power and autonomy.
Two fundamental figures for the developing The classic approach of the administration were Henry Fayol and Frederick Winslow Taylor. The first was originally from Istanbul and strongly defended the linear organization, which is characterized by the centralization of authority; Taylor, meanwhile, from the United States and with a training based on mechanical engineering and economics, is called the father of the Scientific Administration, and inclined towards functional organization, with decentralized authority.
Let's see below the advantages and disadvantages of both concepts:
Advantages of centralization
* the power of decision to a series of administrators, who enjoy a global vision of the company;
* to greater responsibility, greater training and level of knowledge;
* avoids situations in which the same work is carried out twice (due to lack of communication) and reduces the operating costs of decentralization;
* promotes greater specialization in certain functions and a better use of skills.
Disadvantages of centralization
* Often, decision makers do not know closely the problems they are trying to solve;
* given the distance between the parties there are usually unnecessary delays and operating expenses;
* The more people involved in a process, the likelihood of errors increases because of the distortion of the messages.
Advantages of decentralization
* opens up the possibility of decision making from the lowest steps of the hierarchy, which can translate into greater efficiency;
* better use of time, given the greater closeness between the parties;
* bosses must make fewer decisions and can focus on other tasks;
* coordination costs are usually lower than in a centralized organization.
Disadvantages of decentralization
* the decisions do not follow the same line, since they are taken by different groups;
* it may be that two or more people embark on the same task without the others knowing, with the consequent waste of time and money.