When an organization implements centralization, it would be the center of control and pre-eminence that lies in the hands of only a very few individuals. Though it is said to come with many benefits, this strategic method also brings about its own set of drawbacks, just like in any other concept. Let us take a look at the pros and cons of centralization.
List of Pros of Centralization
1. It employs standardization of work.
Implementing this process has often resulted in equality of a person’s behavior, guaranteeing standardized progression and solid judgment.
2. It ensures unbiased work allocation.
Centralization ensures assigning a particular amount of work will be fair and just between different units and responsible individual employees, which will help increase progress within the company.
3. It promotes flexibility.
During emergencies or crises, standardization of tasks will make it easier to revise activities altogether. This means that there will be a greater degree of flexibility in the organization, unlike one without centralized training.
4. It does not allow replication of work.
A centralized organization will leave no scope for replication of actions or tasks, which eliminates additional costs on excessive labor from redundant work.
5. It offers an area of specialization.
Having a leader who handles a particular area expertly will have an immediate advantage. For example, it will make the work distribution process much easier within other levels of a group.
List of Cons of Centralization
1. It encourages dictatorship.
With centralization, employees will often be expected to work based on what has been dictated to him, and none of them are given the authority to make decisions on a particular issue, even if their leaders are not around.
2. It brings out the negatives in an administrative system.
This organizational structure would give way to inequity, as strict conformity to official norms or excessive regulations will be instigated, hindering decisions and delaying work.
3. It is seen as inflexible.
While proponents say that centralization is flexible, opponents think otherwise. They say that requiring staff members to seek approval from their leaders before making a decision would foster rigidity. This is especially true in small establishments, such as restaurant chains.
4. It limits communication.
Small businesses implementing centralization has limited quality of communication through their organization. With tight control, employees would not be inclined to use emails to communicate with their leaders, as they would not be comfortable with the chain of command, where ideas are shared only with the managers.
5. It limits creativity.
Centralization would not work for organizations that require a high degree of creativity from their people. As you can see, this structure does not allow employees to work within a more democratic structure, which means that they cannot share ideas to improve processes.
Generally, the system of centralization is difficult to uphold, as there will be a very thin line between the norm and the outcomes. That is why it is very important to weigh down its pros and cons first to know if it is the right concept to put into effect in your organization, or not.
Brandon Miller has a B.A. from the University of Texas at Austin. He is a seasoned writer who has written over one hundred articles, which have been read by over 500,000 people. If you have any comments or concerns about this blog post, then please contact the Green Garage team here.