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Centralisation
offers greater control and co-ordination; 
decentralisation
offers greater flexibility. 
The table below summarises some of the arguments in favour of centralisation and decentralisation. 
Pro centralisation 
Pro decentralisation/delegation 
Decisions are made at one point and so are easier 
to co-ordinate. 
Avoids overburdening top managers, in terms of 
workload and stress 
Senior managers can take a wider view of 
problems and consequences. 
Improves motivation of more junior managers who 
are given responsibility 
Senior management can balance the interests of 
different functions – eg by deciding on the 
resources to allocate to each. 
Greater awareness of local problems by decision 
makers (geographically dispersed organisations are 
often decentralised on a regional/area basis for this 
reason) 
Quality of decisions is (theoretically) higher due to 
senior managers' skills and experience. 
Greater speed of decision-making, and response to 
changing events, since no need to refer decisions 
upwards. This is particularly important in rapidly 
changing markets. 
It is possibly cheaper, by reducing number of 
managers needed and so lower costs of overheads. 
Helps develop the skills of junior managers: 
supports managerial succession 
Crisis decisions are taken more quickly at the 
centre, without need to refer back. 
Separate spheres of responsibility can be 
identified: controls, performance measurement and 
accountability are better. 
Policies, procedures and documentation can be 
standardised organisation-wide. 
Communication technology allows decisions to be 
made locally, with information and input from 
head office if required. 
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