Meaning of Centralization
Centralization means concentration of authority few hands. Centralization thus refers to reservation of authority of decision making. No one at any level, except on the top, is authorized to take decisions. The subordinate’s job is to carry out the decisions taken.
Henri Fayol was of the view that everything that goes to reduce the role of a subordinate is centralization. And really a subordinate in centralized system is more or less reduced to zero so far as the authority is concerned. He has duties to perform, responsibilities to fulfill and adjectives to achieve. Against these obligations he has no right to say what is wrong or what is right. Whatever is given to him he has to chew and digest.
Centralization refers to an anathematic reservation of authority at a central point within the framework of the organization. Decisions under centralized system of organizational structure are taken at a central point by the managers. Every manager reserves his authority to plan, to organize, to command, to motivate and to control. Only authority relating to routine matters is delegated to the subordinates.