Critical Analysis of Centralization and Decentralization in Public Management
- Introduction
The structure of an organization provides an outline of the company’s guidelines and framework for the management of business operations. There are two types of organizational structure that are found in public management business sectors: Centralized and Decentralized. In the centralized organizational structure, only an individual has the authority to make decisions and provide appropriate direction for the organization. (Zabojnik, 2002) On the other hand, decentralized type of organizational structure involve responsibilities held by several individuals to take effective business decisions and manage the business. Having an efficient team environment is very much important in decentralized organizations at several business levels, which means that individuals at each business – level have certain authority to take crucial business decisions. (Won, 2008) The main aim of Centralization is to enhance the efficiency by considering the benefit of economies of scale: such as improvising the scale and enhancing reliability by reducing error opportunities. On the other hand, the main aim of decentralization is to improve flexibility and speed by effectively reorganizing the activities to improve execution and local control of a particular service. (Marschak, n.d.)
A researcher called Allen said that Centralization is the consistent and systematic authority reservation at certain important levels in the organization. The practical implications of applying centralization in public sector are: (1) The decision making power is reserved at the top – level (2) Managers at the middle level will have the operating authority (3) In case if the top – level authority is not available to make certain crucial decisions, it can lead to chaos in the public sector organization. On the other hand, (1) the work responsibilities and burden is less on the top – level chief executives in the decentralization model (2) In the decentralization model, implantation of diversification is very easy (3) The managers at middle – level and other subordinates get a good chance to take independent decisions and develop their capabilities and skills in the organization. (4) Employee motivation is highly encouraged in the decentralization model (5) However, there will be certain issues in the decentralization structure with respect to coordination as it is quite difficult to maintain all the divisions and departments in the public sector. (Managementstudyguide.com, 2017)
(I.C. JPS 2033)