Centralized organizations have some advantages. Which of the following statements is true? Select all that apply.
A. Highly cost-effective
B. Makes management easier
C. Reflects the interest of the worker
D. Allows quick decisions or actions.
Correct Answer: A & B
Centralized organizations need only a few managers hence they are less expensive and easier to manage. In a centralized organization, the decision-making powers are retained in the head office, and all other offices receive commands from the main office. The executives and specialists who make critical decisions are based in the head office.
Option B: A centralized organization benefits from a clear chain of command because every person within the organization knows who to report to. Junior employees know who to approach whenever they have concerns about the organization.
Option C: When an organization follows a centralized management structure, it can focus on the fulfillment of its vision with ease. There are clear lines of communication and the senior executive can communicate the organization’s vision to employees and guide them toward the achievement of the vision.
Option D: In a centralized organization, decisions are made by a small group of people and then communicated to the lower-level managers. The involvement of only a few people makes the decision-making process more efficient since they can discuss the details of each decision in one meeting.