Decentralization can be beneficial in the fact that it allows for experts to take control of specific functions of an organization and easily convey information back and forth. It also allows for direct contact and relationships with managers. Decentralization also allows managers to participate in planning. Unfortunately, there are disadvantages of decentralization as well.
Some managers will find that they have too much work to do and other will have too little. It will also become difficult to have managers take on different tasks or projects if needed because of overspecialization. Also, if one manager leaves, there will not be anyone to pick up his place with quite the same knowledge and expertise. Centralization is another method which has its pros and cons. A positive aspect is the fact that the corporate decision maker has full control over the organization and the decisions that the organization must follow.
The organization may also benefit from the fact that all information is reported to the corporate decision maker; he or she listens to all comments and concerns and is able to infer from all information received. There are disadvantages to centralization as well. The larger an organization becomes, the more information that one manager has to comprehend and consider; eventually he/she will need help. Tasks will have to be divided or else the organization will become disorganized and at times, seem chaotic. What happens if the manger is away for whatever reason? Timely corporate decisions are impossible when no one is around to make them.
Whether an organization chooses centralization or decentralization is completely a matter or choice. One system may work better than the other depending on the situation or the type of organization. It is an important choice and should be carefully and wisely considered.