Authority to make most decisions is shared out. Power can be delegated to people below. eg. Sales manager to Sales officer.
All major decisions made by one person or a few senior managers.
Advantages of Decentralised
Employees can use expert knowledge of their sector to make quick decisions.
Disadvantages of decentralised
Inconsistencies may be developed between departments.
Decision makers might not be able to see the overall needs of the business.
Advantages of centralised
Senior managers tend to have plenty of experience and can get and overview of the whole business.
Policies will be uniform throughout the business.
Disadvantages of centralised
Decisions can take a long time to filter through employees. This means the organisation reacts slowly to change.
Central managers may lack specialist knowledge.
Order of organisational charts
Person at top - has authority of the people below.
People below - subordiantes
This is called the chain of command.
Span of control
Number of people that a worker directly controls.