Centralization versus Decentralization of Authority Chapter uri icon

abstract

  • Centralization refers to authority and decision making by a central body such as top management. Decentralization refers to authority and decision making being delegated to lower-level management or frontline employees. If one were to place the two concepts on opposite ends of a continuum, he or she could begin to judge how centralized the decision making and authority were of an organization; most organizations will fall somewhere in between the two concepts. To judge what is best for an individual organization, it must examine the system, the structure, the environment, and the type of decisions that are needed for success. Authority and power are important considerations regarding organizational decision making, along with structure and strategy. The concepts of centralization and decentralization may generate discussion regarding the realm of authority and determining the when, where, and who of making decisions. In an organization, one may be given authority to have the power to make decisions affecting others. Further, authority refers to the power an individual has to make decisions affecting others; generally there is a superior and subordinate. In most organizational settings, authority is granted based on the position one holds in the company. A basic understanding of power is the possession of controlling influence over another. Or, power is the ability to influence a subordinate to work toward the goals and objectives of the organization.

author list (cited authors)

  • Swayne, L., & Dodds, M.

editor list (cited editors)

  • Swayne, L. E., & Dodds, M.

Book Title

  • Encyclopedia of Sports Management and Marketing

publication date

  • January 1, 2011 11:11 AM