Centralisation refers to the process by which activities, particularly those related to planning, decision-making, and control of strategies and policies, are concentrated within a specific group, sector, department, or region within an organisation
. This leads to a power structure where the central group, also known as the head or core group, occupies the highest level of hierarchy and has significantly more authority, prestige, and influence over other groups considered its subordinates
. Some key aspects of centralisation include:
- Concentration of decision-making power : In a centralised organisation, decision-making powers are retained in the head office, and all other locations are directed from there
- Hierarchical structure : Centralisation aligns with cultures that embrace a hierarchical, conformity-focused approach
- Cost savings and standardisation : Centralisation can bring cost savings, standardisation, and sharing of best practices
An antonym of centralisation is decentralisation, where authority is shared among numerous different groups, allowing varying degrees of autonomy for each
. The choice between centralisation and decentralisation depends on factors such as an organisation's size, culture, technology, employee engagement, external environment, and the evolving nature of work
