centralization

the vertical dimension of ORGANIZATION structure. Organizations are centralized when important decisions are largely taken by managers at the top of the organization. There is a persistent tension between DECENTRALIZATION and centralization organizations. Centralization of decisions is useful to provide central direction to the organization. However, it can mean that the organization cannot respond quickly to PRODUCT MARKET developments. Also, if lower level managers are precluded from making important decisions it can have negative effects on their job satisfaction. See ORGANIZATIONAL ANALYSIS.

centralization

the concentration of economic decision-making centrally rather than diffusing such decision-making to many different decision-makers. In a country, this is achieved by the adoption of a CENTRALLY PLANNED ECONOMY where the state undertakes to own, control and direct resources into particular uses. In a firm, centralization involves top managers retaining authority to make all major decisions and issuing detailed instructions to particular divisions and departments.

See U-FORM ORGANIZATION.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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References in periodicals archive

I don't stand for a "centralistic" but a "common" Austrian broadcasting.

Austria: a federation without federalism

The national political level is becoming too narrow for dealing with the large social and economic problems of the Welfare State, and at the same time too wide and centralistic to react fiexibly to social and economic developments on the local and regional level.

A fundamental restructuring of the centralistic policy and of the financial relationships within the national Welfare States is required (Netherlands Scientific Council for Government Policy, 1990).

European integration and the erosion of the nation-state

Many ideas came to the fore -- from the centralistic model to the suggestion that the empire be developed into a federalized power.

Hungarian minorities in Europe: a case study

Yet another proof of superiority was precisely the triumph of capitalism over the centralistic system which existed in the state-controlled markets.

The global economic recession and the change in the macroeconomic paradigm

Thought, a centralistic hierarchy of subordination, does not provide systems thinking leading to holism, but networking and co-operation, especially the interdisciplinary one, does (Zenko, 1999; Rosi, 2004; Udovicic, 2004; Parharkangas et al., 2005; Treven and Mulej, 2005; Malcolm and Chroust, 2006; Rosi and Mulej, 2006).

The natural human attributes do not block interdisciplinary co-operation necessarily; they allow for transition from a centralistic to a co-operative management (Lester, 2005; Rooke and Torbert, 2005).

Systems theory: a worldview and/or a methodology aimed at requisite holism/realism of humans' thinking, decisions and action([dagger]), ([double dagger])

An over-bearing or centralistic decision-maker not only tends to drive other talent away, but the negative consequences of losing such a leader can also be catastrophic.

The new face of enterprise risk: the old model of basing corporate strength on industrial might and production, capacity is becoming a thing of the past. Information is the new currency of corporate success, and with that comes a new primary asset and source if risk: people

But if the plan to put all HPH areas under Perum was seen as too centralistic, the system could be changed with Forest Management Body (BPH).

IRIAN JAYA STILL OPEN TO NEW INVESTMENT IN TIMBER INDUSTRY

True, a powerful and functioning centralistic hierarchy can always cut off the sick part of its body to preserve the `progress' of the functioning rest, even if this operation endangers the health of the whole pyramid.

Retrogression accompanied by political disequilibrium, aggravating economical weakness, backwardness in education and culture, deteriorated by centralistic hierarchy, and the spasm of ideological fundamentalism and intolerance, is bound to bring society to the lowest level of mere physical survival, the nightmare of self-strangulation.

Socio-technical functioning and anthropogenic crises