Question

Define Centralized and Decentralized and tell me if you think more companies have a centralized or decentralized organization structure. Please explain your answer

Answer 1

There are two types of organisational structure which helps in the decision making and managing the business operations.

These organisational structures are :

• centralised
• decentralized

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​​​​​​​1. Centralized organisational structure : This structure is mainly used in small business where all the power of decision making is in the hands of an individual.
The individual responsible for all the decision making is the central point of the business and for this reason it is known as centralized organisational structure.

The decision makings is fast in this type of structure.

2. Decentralized organisational structure : It involves various individuals in decision making (i.e the power of decision making for the organisation is not given to one person).
Basically this type of organisational structure is used in large businesses/organisations. Team environment is needed in decentralized organisational structure at different levels.

This type of organisational structure requires expertise of an individual in various fields of business.

More companies have decentralized organisational structure, as this type of structure helps in creating transparency among the business workings and does not vest all the powers of decision making in the hands of an individual.
Centralized organisational structure is not much effective in large organisations. It is only good for small businesses.