Centralization Vs Decentralization

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What is decentralization?
Decentralization is a broad term with many applications. First used in 1846, it is defined as “the dispersion or distribution of functions and powers; specifically: the delegation of power from a central authority to regional and local authorities” (“Decentralization”). Decentralization is often hard to understand without discussing centralization. Centralization is defined as all decision making power concentrated in the hands of a primary authority.

Decentralization is most notably used in the government and business sphere. A decentralized government spreads the decision making power over multiple local administrations, such as in a republic. Whereas, a centralized government is a single individual or small …show more content…

. .business that has many complicated rules and ways of doing things”) (“Bureaucracy”). Decentralization of human resource management allows personnel generalists to respond quickly to individual setbacks, such as loss of personnel, without having to wade through redundant paperwork and rigid procedures. Moreover, personnel generalists are more accessible, allowing division managers to resolve their personnel issues without multiple phone calls to various specialists in a distant centralized human resource department. This can save valuable time and …show more content…

In today’s fast-paced, highly-competitive global marketplace, many companies are embracing the less cumbersome and more flexible decentralized human resource approach. However, there are advantages to centralization and some business professionals point out that in the global marketplace:

Companies will have to be more transparent with clearly defined, centralized, easily manageable departments, which are cost effective and efficient. For example, one client has determined that 80% of its payroll business processes are the same on a global basis – so they are centralizing their payroll operations to optimize that 80%. . .[Also] Pressure will develop to set global standards. As barriers fall between cross-border interaction, global standards will make the exchange of information and the execution of company policies, standards and objectives easier (“What

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