Every organization structure in the beginning starts with centralized management structure. But with its every growth it tends to decentralize and really after its full growth it cannot remain centralized. Delays and difficulties of centralization yield to decentralization but does not mean that centralization is never good. It is good at times and serves better if the structure is not large and growth as comparatively small or medium-sized. The following are some important advantages of centralization.
Facilitates Personal Leadership
In a small and medium sized enterprise personal leadership goes a long way in ensuring its success. Under a manager-leader who is talented the following advantages accrue to the enterprise;
- Quick decision
- Enterprising efforts
- Imaginative leadership
- Forceful action
- Successful operations
Small enterprises are benefited by centralized management structure. In fact even larger enterprises having expanded up to the maximum also have centralized system of management structure though under the garb of decentralization. Truly speaking whenever enterprises decentralize they create separate units, sections department etc. these separate units are headed by the specialists in the field who are to take decision for the whole unit at this level. For the unit then it may naturally be termed as centralized system though formally the enterprise has decentralist it.
For unification and integration of the operation of the enterprise unified direction is a necessity. This unified direction is possible only in centralization which obviously facilitates integration of the whole operations under one command.
Promotes Uniformity of Action
Uniformity of action is followed by integration of the operations of the enterprise under one direction and command. Buying goods, recruiting personnel’s advertising, planning, framing the policies and chalking out programs are a few of the activities in which uniformity is desirable for better results. Centralization promotes such a uniformity of action.
Successful Handing of Emergencies
Quick decisions, imaginative leadership for forceful action and flexibility are a few of the advantage of centralization and personal leadership which help in successful handing of a situation which calls for immediate and quick decisions. Under centralized system this can be easily taken and emergencies, thus, may be tackled properly and with desired results.