DECENTRALIZED

ORGANIZATIONAL
STRUCTURE
Centralization:

The process of transferring

and assigning decision-
making authority to higher
levels of an organizational
hierarchy.
Decentralization:

The process of
transferring and
assigning decision-
making authority to
lower levels of an
organizational
hierarchy.
DECENTRALIZATION:

Definition: The process of transferring and assigning decision-making

authority to lower levels of an organizational hierarchy.

In a decentralized organization, the decision making has been

moved to lower levels or tiers of the organization, such as
divisions, branches, departments or subsidiaries.

Knowledge, information and ideas are flowing from the bottom

to the top of the organization.

The span of control of top managers is relatively small, and there

are relatively few tiers in the organization, because there is more
autonomy in the lower ranks.
FORMS OF DECENTRALIZATION:

Deconcentration: The weakest form of decentralization.

Decision making authority is redistributed to lower or regional
levels of the same central organization.

Delegation: A more extensive form of decentralization. Through

delegation responsibility for decision-making is transferred to
semi-autonomous organizations not wholly controlled by the
central organization, but ultimate accountable to it.

Devolution: A third type of decentralization is devolution. The

authority for decision-making is transferred completely to
autonomous organizational units.
STRENGTHS OF DECENTRALIZATION - CHARACTERISTICS

Philosophy/emphasis on: bottom-up, political, cultural and learning

dynamics.

Decision-making: democratic, participate, detailed.

Organizational change: emerging from interactions, organizational

dynamics.

Execution: evolutionary, emergent. Flexible to adopt to minor issues

and changes.

Participation, accountability. Low risk of non-invented-here behaviour.

Thank You