Centralisation
Centralisation concentrates specified decision-making authority at a higher organisational level or central unit. It can support consistency, coordination and specialist control, but may slow local responses and make less use of local knowledge. The degree varies by decision: an organisation can centralise funding while decentralising customer-service choices. Assess where actual authority lies, rather than infer it only from an organisation chart.
Worked example
A retail chain requires head office to approve product ranges and prices, while store managers decide staff rosters. Commercial decisions are relatively centralised, but not every operating decision is.
Common mistake
Do not describe centralisation as necessarily involving no consultation. Senior management can seek extensive local input while retaining final authority.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |