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Which factors influence the degree of centralization?

Which factors influence the degree of centralization?

Factors Determining Centralization of Authority:

  • Achieving Uniformity of Action:
  • Facilitating Integration:
  • Promoting Personal Leadership:
  • Handling Emergencies:
  • Standardization of Procedures and Systems:
  • Facilitates Evaluation:
  • Economies:
  • Co-ordination of Activities:

What factors should be taken into consideration while deciding the degree of Centralisation and decentralization?

8 Factors to Determine the Degree of Effective Decentralization

  • Costliness of Decisions:
  • Uniformity of Policy:
  • Economic Size:
  • Availability of Managers:
  • History of the Enterprise:
  • The Philosophy of the Management:
  • Decentralisation of Performance:
  • Environmental Influences:

What are the factors affecting decentralization of authority?

The factors internal to the organisation which affect decentralisation are as follows:

  • Size of the organisation: ADVERTISEMENTS:
  • Cost control:
  • Philosophy of management:
  • History of the enterprise:
  • Functional areas:
  • Ability of subordinates:
  • Growth of enterprise:
  • Communication system:

What is the degree of centralization?

Centralization is the degree to which formal authority is concentrated in one area or level of the organization. In a highly centralized structure, top management makes most of the key decisions in the organization, with very little input from lower-level employees.

How is the degree of centralization and decentralization determined?

Centralization and decentralization are two extremes. Any of these cannot be exclusively adopted by any organization. In any organization there is a lesser or greater degree of decentralization. The degree of decentralization is determined by a large number of factors and some of them are briefed below: 1. Size and Complexity of the organization 2.

How does size affect the use of decentralization?

In most instances, organizations that are large in size utilize decentralization as small-sized entities make use of centralization. Nature of functions– the type of functions carried out by an institution influence the form of authority to exercise.

What are the factors that affect the decentralization of authority?

Competency of the manager’s– availability of managerial manpower and the cost of human capital on the organization limit the level of decentralization of authority. Most firms would be in favor of centralized authority to avoid extra labor costs of hiring managers.

Is the right kind of decentralization is inevitable?

Indeed, the large enterprise that prides itself on the right kind of decentralization recognizes the inevitable, although the extent and effectiveness of decentralization may differ widely among companies, depending largely upon the quality of their management.