Centralisation and Decentralisation

HideShow resource information

Centralisation and Decentralisation refers to the extent to which authority is delegated in an organisation. If there was complete centralisation then subordinates would have no authority at all. Complete decentralisation would mean that subordinates had all the authority to take decisions.

Disadvantages of Centralisation

  • Senior management have more control and can make decisions from the point of view of the whole business. Cosistency across the business.
  • Senior managers are more experienced and skilful in making decisions and so should be of a better quality.
  • In times of crisis a business may need strong leadership by a central group of manager.

Advantages of Decentralisation

  • It empowers and motivates workers.
  • It provides subordinates with greater job satisfaction by giving them more say in decision making.
  • Subordinates may have more knowledge of 'local conditions' affecting their area of work allowing them to make well-informed choices.
  • It allows greater flexibility and quicker response to change.
  • It gives training for taking over higher positions.

Personnel or Human Resource Department

This department deals with the people that work in, or want to work for the firm. HR departments have to recruit and train staff, terminate employment through retirement, redundancy or dismissal, organise staff appraisals, prepare employment contracts, deal with negotiations with staff and employers over grievances and disciplinary procedures and supervise health and safety concerns. In addition the HR department keep records of all staff, negotiates wages and working conditions with Trade Unions and speak on behalf of the firm at tribunals. It is also the responsibility of the HR department to organise welfare facilities such as childcare and first aid rooms and organise staff training.

Marketing Department

The marketing department gives the consumers point of view within a firm and acts as a bridge between the consumer and the production production department. It sets up market research, works with the design and production department ro ensure prroducts are what customers want and organise the advertising, promotion and distribution of products and servies.

Sales Department

This department plans, organises and administers sales. It sells a firm's products through sales respresentatives, receives orders and passs them on to the production department, deals with customer complaints, makes sure all sales documents are sent at the right time, receives payments and passes them onto accounts.

Production Departments

This department plans, organises and


No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Human resource strategies resources »