Decentralization helps in reducing the burden of the top executives a they delegate their power to their subordinates and make them free for more important work requiring their urgent attention. Policy framing, programme scheduling and important decision making are a few of the important jobs which top executives have to undertake and give proper attention.
Decentralization is opposite to centralization where there is no concentration of authority instead diffusion is planned and executed. Decentralization emerges from the principles of delegation. Delegation plays role of a peace-maker in decentralization. Without which decentralization might have been a distant possibility. Delegation makes the subordinate feel that he too is important for the organization
Every organization structure in the beginning starts with centralized management structure. But with its every growth it tends to decentralize and really after its full growth it cannot remain centralized. Delays and difficulties of centralization yield to decentralization but does not mean that centralization is never good. It is good at times and serves better if the structure is not large and growth as comparatively small or medium-sized.
Centralization means concentration of authority few hands. Centralization thus refers to reservation of authority of decision making. No one at any level, except on the top, is authorized to take decisions. The subordinate’s job is to carry out the decisions taken. The term ‘centralization’ should logically mean the opposite of ‘decentralization’ that is all responsibility and authority is retained at a central points.