Most organizations are neither fully decentralized nor fully centralized in their structure. Many centralize parts of their decision-making process that affect the strategic direction of the organization and delegate decision-making powers to experts in areas requiring knowledge of a particular topic, technology, product or market. A high degree of centralization means more coordination and less flexibility. Decentralisation means more flexibility and less coordination. The choice of structure will affect all other strategic decisions that the organization will have to make. One way to deal with this pressure is to centralize some decisions and decentralize others. For example, it is easier to decentralize decision-making when the organization has a centralized policy on workers` qualifications. Most companies deal with issues related to the specifics of centralization or decentralization of decision-making. The key question is whether the Authority should manage all things at the centre of a (centralised) enterprise or whether it should be delegated away from the (decentralized) centre.
The term has many meanings in several areas. In political science, centralization refers to the concentration of power of a government, both geographically and politically, on a centralized government. The implementation of a management control system is very important for an organization. Companies must constantly consider how they can improve and remain competitive in an ever-changing market. This requires that the organization be both proactive (on strategic planning) and retrograde (by assessing what happened), that performance is constantly monitored and that necessary adjustments are made. If management is centralized, barely one or two have a chance to make decisions on important issues. This method does not offer others the opportunity to develop their thinking, whether at the middle or lower level, and to give them the opportunity to independently demonstrate their skills, skills or efficiency in business management. Decision-making is a matter of authority. A key question in hand is whether authority with management should be at the centre of a (centralized) company or whether it should be delegated further down the hierarchy, away from the (decentralized) centre The following benefits, derived from a centralized management system: research and development-oriented organizations (R and development) D), such as Microsoft and Lucent Technologies, tend to be decentralized.