Centralization of decision-making indicates the locus of authority and refers to the degree to which power is concentrated in an organization. While decision authority is highly concentrated in centralized organizations and resides in the top management team, decision-making in decentralized organizations is dispersed and also assigned to lower-level managers or even front-line employees. Put differently, centralization and decentralization denote opposite ends of a single spectrum and determine who makes decisions that affect the behavior of the firm.


Strategic Management Operation Management Manufacturing Firm Service Firm Organizational Unit 
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Copyright information

© Gabler Verlag | Springer Fachmedien Wiesbaden 2012

Authors and Affiliations

  • Sebastian Kortmann
    • 1
  1. 1.MünsterGermany

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