Advantages of centralization

1.       Specialization management: - Higher the degree of specialization greater the need of centralization. To manage effectively specialization, centralization is preferred. Tall organizational structures with different functional department are better managed by centralization. Effective control and coordination are fascinated by centralization.

2.       Complexity management: - Specialization of job and narrow span of management create complexity in organization and such complexities are better managed by centralization. Uniform policies and practice are better managed by centralization.

3.       Significant non-programmed decision making: - Significant non-programmed decision should be taken by top level management. They are very important from the point of view of organization. They involve high cost.

4.       Environment stability: - Centralizations suitable in stable environment. It is very easy to take decision in stable environment.

5.       Improved capacity at lower level: - When lower level management have less capacity to take decision or when lower level management is not competent enough to take decision and solve problem at that time centralization is preferred.

6.       Crisis management: - Organization faces different crisis and to manage such crisis quick decisions are required and top level management can take quick decision. During the time of emergency quick decisions are required.

Cost-effective: - Centralization is economical and cost-effective. Middle and lower level manager are not given too much facilities as they do not have to take decision and solve problems.