What are the factors influencing centralization and decentralization?

Centralization refers to that organizational structure where decision-making power is confined to the top management, and the subordinates need to follow the instructions of their seniors. Blockchainx, Centralization of authority is essential for the small-scale organizations which lack resources and finance.

Factors influencing Centralization and Decentralization

centralization

It consists of delegating all administrative, budgetary and social functions to the State or to institutions located in the country’s capital. In other words, political, legal and economic power is centralized and little power is vested in local entities or authorities. According to the neoclassical theory of Economy, this organizational model of a State is called centralism .

It should be noted that a phenomenon that could be located in the middle of what is decentralization and centralization , is the administrative deconcentration that, although it does not mean that the central government gives up all power, delegates some functions to local governments.

Therefore, deconcentration would be the intermediate level between both political elements.

Types of centralization

Administrative centralization: administrative matters are part of the responsibilities of the state.

Organizational centralization: It is the political functions are exercised by the institutions managed by the State.

Decentralization

In order to establish a comparison between what is decentralization and centralization, it is necessary to first know their concepts.

In this sense, Token Swap Platform Development decentralization is a term that refers to the political organization of a government, that is, it consists of decisions regarding the administration and budgets that, in general, are matters of the capital of the country, are transferred to local entities. So they are given a certain autonomy in matters related to management and also some legal regulations.

In other words, it refers to the decentralization of political and economic power, so that it is distributed to the other regions that make up a country.

Types of decentralization

Territorial decentralization: it is the concession of administrative and budgetary functions to the communities without this meaning the separation of the local authorities from said management.

Decentralization of services: is the granting of authority over industrial companies, public services, commercial establishments, among others.

Administrative decentralization: is the granting of administrative and financial powers to local authorities.

Difference Between Decentralization and Centralization

Now that we know what decentralization and centralization are, it is time to know how each of these fundamental axes that define the organizational structure of a government differ.

Let’s see below:

In decentralization, power is concentrated in local authorities and collectivities. In centralization, it is in the hands of a single authority. In decentralization, decisions on economic and social matters are concentrated in several hands, that is, they are taken jointly. In centralization, political, administrative, economic and social decisions are the sole responsibility of the president.

On the other hand, in decentralization, in order to execute actions for the benefit of the nation, the authorization of the central axis of the government is not necessary. In centralization, all those actions that are going to be executed at the local level must be consulted and authorized by the central government.

In decentralization, bureaucratic processes are minimized. In centralization, the opposite happens.

Finally, while in decentralization, if there is no preparation on the part of local authorities and collectivities, the model can fail. While in centralization if the central government fails, the entire administrative structure tends to fail.

0