Throughout this blog, we have referenced different elements
of the organizational structure. I am
now going to focus on the concept centralization. Centralization is a very simple concept that
can result in many different outcomes in the organization structure. Centralization is the element of the
Organizational Structure that refers to where decisions are formally made in an
organization. Organizations or companies
can have many different regulations that they stand by and follow. Every organization can be different, and that
is why centralization can become so unique throughout businesses across the
world. For example, Wal-Mart is a
company that has to have a certain level of centralization at all times. In a recent article written in January, Times
Magazine had an article about Wal-Mart and just how big the brand has
become. It read, “Wal-Mart's
centralization of power at its headquarters in Bentonville, Ark., could produce
agitation among the managers of its stores, who have traditionally been granted
considerable independence in stocking what locals want.” ( Because the chain of stores is so widely known,
it is always changing how its operations are run, and centralization is a big
part of this.
Some
companies are considered to be a highly centralized structure when only top
managers within a company have the authority to make an executive or final
decision. Companies that are considered
a small business, and are perhaps family oriented businesses use this
concept. Small businesses are a large
portion of the business world out there and small business owners aren’t going
to give their authority to lower ranked employees easily, nor do they need
to. I work for a company that is
considered a small business, and also happens to be a family owned
business. The company only has about 20
employees in the office; therefore the two owners leave it up to themselves to
make executive decisions that affect the company’s future. Although the company is centralized with
important and executive decisions, the organization has also decentralized
different departments. This is a way for
the President and Vice President of the company to take a break, and not have
to make every single small decision that may affect the company’s future. This way the various different departments of
the company are running smoothly, and everyone is on the same page.
When a
company shows that decision making in their company can be pushed down to lower
level employees, they possess a decentralized structure. This concept is used more often in companies
that continue to grow larger and expand their clientele, or service. This tends
to be a good sign because that means that the top management doesn’t have time
to make every little decision that may or may not affect the company
greatly. There are many ways to try and control
decentralized companies and for top management to make sure that their
employees are working efficiently.
Management first has to start out by putting people in charge that they
can trust. If management does not have
trust with their employee to make executive decisions, then they should
probably not be in that position. It is
also very important that management has meetings with their employees to make
sure that everyone is on the same page.
It is important for the employees to know exactly what management is
looking for of the company, and how every decision can affect the company’s
future, whether it is good or bad. An
example of a company that engages in a decentralized structure would be a big
company like, the department store, Macy’s or Wal-Mart, which I previously
stated. The decentralized structure
makes it possible for people other than the CEO’s to make executive decisions. Many
organizations are moving toward decentralized structures rather than
centralized structures.
While
researching this concept, and looking for different perspectives on
centralization, as well as decentralization, I came across an article called, “Men,
Women, and Leadership Centralization in Groups over Time”. In this article is summarized the following
four points:
- “Women, more than men, preferred equality norms in groups
- All-male and majority-male groups had relatively centralized leadership structures
- All-female groups had relatively decentralized leadership structures
- Balanced and majority-female groups were relatively centralized at the onset of group interaction but decreased in centralization over time.” (Berdauhl, Anderson, 2005)
What I found interesting in those statements was that
all-male and majority male groups tend to have more of a more centralized
leadership structure and all-female groups have more of a decentralized
environment. I am not sure if this is
because men want to have the control, and are unable to give up some of their “power”
as easily as women might do. Or perhaps
women are just more comfortable with others handling problems that are not top
priority to them. This article doesn’t
particularly have an exact answer to why this is, but it is interesting to look
at the statistics of different organizations and see how men run organizations versus
how women run their organizations.
I also
learned that many people have their different opinions about centralization
versus decentralization. According to a
book I found called, Daedalus, the author describes his opinion on the idea of
structure in a business, more specifically the political structure. It reads, “I believe that the way you create
structures affects the behavior of people; that the constraints of structure
shape actions, even those of people who kick over the traces of reaction.” (Daedalus,
2000) This is a different aspect of how centralization and decentralization can
affect those involved. The behavior of
the people that the centralization and decentralization is affecting is
something that an executive has to watch.
If their behavior is negative, then perhaps the changes that were
previously made need to be altered to better the employee’s opinion of the organization. This just shows how important the concept of
Centralization is, in any organization.
Berdahl, J. L., & Anderson, C. (2005). Men, women, and
leadership centralization in groups over time. Group Dynamics: Theory,
Research, and Practice [PsycARTICLES], 9(1), 45-45. doi:
http://dx.doi.org/10.1037/1089-2699.9.1.45
Daedalus , Vol.
96, No. 3, Toward the Year 2000: Work in Progress (Summer, 1967), pp. 680-690
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