When authority is concentrated at the top level of management, the organization is said to be decentralized.

a. true

b. false?

False

A centralized organization is one in which all the decisions are handled by only a few people, particularly those in the top level of the management. Those at the lower level positions in the organization (including managers) have limited power to make decisions and do not have the power to implement new methods unless given approval by the top level of the management to do so.

A decentralized organization is one where there is a systematic delegation of authority and decision-making at all levels of the management. It employs flexible processes and open communication between the different levels of management. However, the top level of the management is still the one responsible for making major and important decisions and policies for the company as a whole.