The systematic and consistent reservation of authority at central point within the organisation is called centralisation of authority. The various activities of office are brought under the direct control of the office manager. According to Fayol—"everything which goes to increase the importance of the subordinate's role is decentralisation and everything which goes to reduce it is centralisation." The importance of the subordinate is reduced and the importance of the superior executive is increased in centralisation.
Centralisation of office services may be physical or functional centralisation. In the former state of centralisation, all office personnel are placed at a central place for work but in the later set up, personnel are scattered at departmental level but their control is exercised from a central point. Cenratisatioh of authority in pure sense of the term is not found. A mixture of centralisation and decentralisation is the practice of today.
Advantages of Centralization of Authority
The various advantages of Centralisation of Authority are :
1. Reduced cost—The standardised procedure and method helps in considerably reduction of office cost. Office cost is reduced as it does not emphasizes on more specialists, and more departmental machines and equipment.
2. Uniformity in action — Uniformity in action is established throughout the organisation because of central administrative control. The same executive supervises the work and same type of office equipments are used which ensure uniform performance of activities.
3. Personal leadership—Centralisation encourages and permit personal leadership. The introduction of personal leadership facilitates quick action, aggressive marketing and attainment of pin-pointed objective or purpose,
4. Flexibility — Centralisation permits flexibility and adaptability of the organisation to the changed circumstances. Occasional pressure of extra clerical work is handled with the existing staff.
5. Improved quality of work—Improved quality of work is possible because of standardised procedure, better supervision and use of improved- machinery.
6. Better co-ordination — Centrlisation facilitate better coordination among various operations. Direct control and supervision are facilitated which results in less likelihood of conflict of authority and duplication of work.
Disadvantages of Centralization of Authority:
Opponents attribute the following disadvantages against centralisation.
1. Delay in work—Centralisation creates loss of man-hours and delay in performance of work because of transmission of records from and to the central control room. Quick decision is not possible which also results delay in office work.
2. Remote control—Better supervision is not possible as the executives are under heavy pressure of work. Slackness in work is developed in the absence of better control and supervision.
3. No loyalty— In centralisation there is no subordinate's initiative in work because they are required to do such works which they were asked for. Workers work like machine which results in no involvement in work and absence of zeal. All these factors stand as barrier in the development of loyalty to work.
4. No Secrecy—Secrecy is not possible in centralised set up organisation because here orders and decisions flow from one place and are conveyed to all.
5. No special attention—In centralisation no special attention is given to special work as all works are done at one place.