In the case of business management there are many advantages and disadvantages when it comes to a centralized or decentralized system of authority for any organization. Starting with a centralized organization structure the main characteristic would be a few key leaders who have control over decision-making often concentrated in the same headquarters, serving as the base for the corporation. Centralization of authority will keep a unified concept throughout a company because a strategy can be clearly delegated from a CEO to all employees on all levels and allow them to work towards the same goal. With accountability on a select number of leaders it is easier to trace effective, and not so effective, decisions back to who is responsible for them and reducing the time it takes to come to important decisions. By leaving the accountability to upper management, it will reduce the instances of conflict within a growing company and allowing workers to perform without the high level pressure of making most decisions. A reduced time on coming to decisions also means they can implement changes faster to reflect changing markets. The biggest disadvantage of centralized authority is the lack of morale with low-level workers because they have very little power to troubleshoot problems and make their own decisions without consulting upper management. Also without empowerment, product advancement can remain stagnant. It is for these reasons a centralized authority structure is most suitable for smaller businesses and corporation whose span of operation is a single country or continent or a religious organization centered on the resolutions of its minister.
The alternative to central authority is a decentralized authority structure focusing on delegating decisions to management in a number of different departments and leaving the decision-making power, in varied levels, to all employees. As a result of more people making vital decisions, there is less pressure on top executives to solve problems and maintain control within a company.
