STEEMKIDS CRYPTO ACADEMY WEEK 3/DECENTRALIZATION AND CENTRALIZATION BY MADILYN02

Hi everyone, it's a thing of joy for me to be part of this learning process.
Today I am going to give answer to the assignment questions for this week's lecture.

Question 1

Define Decentralization and Centralization

Centralization

Centralization is an organisational structure whereby the decision making power is confined to the top management, and the subordinates follow the instruction of the seniors.

Put simply, centralization is a system whereby authority or power is being is being handled by a person or organisation.

Example centralized system

A department is run by Mr Jones. Mr Jones appoint a manager, sales person, cleaners and helpers, he delegates work among the appointed workers according to their skills and position.

Yes there are others working for the company but he still controls the affairs of the department in terms of decision making.
He is the one who determines the routine of the workers and controls their activities.

The above-mentioned is an example of a centralised structure because all the staffs follow the instruction of a single person or entity.

Decentralization

Decentralization System is the opposite of centralization.
Decentralization is a structure or condition whereby power or control over activities are in the hands of several persons and not just in the hand of a a singular person.
Decision making is not in the hand of one man but several persons come together to make decisions.
In a decentralized system, everyone makes his own decisions and no one controls another.

Question 2

Kindly list their differences

Differences between Centralization and decentralization.

Centralization	Decentralization
It is handled by a person	it is handled by several persons.
The top management determines the routine and activities of the subordinate.	Power is delegated to everyone.
It does not take much money to run it	a lot of expenses are made to run this system
Quick and effective decision making	Slower decision making process
Implemented in small sized firms	implemented in large sized firms

Question 3

List the 5 advantages and disadvantages of both a centralized and decentralized system

Advantages of centralized system

• Efficient cost: the owner or manager doesn't spend much on the office and administrative expenses.

• There is control over the actions of subordinates. They follow the instructions of the management and this helps to reduce the risk of fraud.

• It creates uniformity in action

• The workers/subordinates are answerable to the top management and therefore they work hard to improve the quality of their work.

• A centralized organisation focuses on a vision and every subordinate works towards achieving it

Disadvantages of centralized system

• A centralized system slows down business operation. Since all day to day decision is taken by the top management and staffs make daily reports directly to the seniors, at times when there is no managerial staff, it causes the daily business operation to slow down because the subordinates cannot take immediate decisions.

• A centralized system discourages initiative.
  All subordinates are given instructions to follow and they do not question the decisions of the top management. These subordinates are intimidated fro making their own suggestions.

• Centralized system burdens the too management.
  The top management have to do all he planning and decision making work. They also control the day to day operations. For such reason the management becomes overburdened and unable to concentrate on the growth of the business.

• Lack of upward communication
  Subordinates merely follow the instructions of the top management while least attention is given to their feedback. Because of this pattern, upward communication is hindered.

• Problem solving is quite difficult in a centralised system since the decision maker is different from the implementer.

Advantages of decentralization

• Decentralization reduces the burden on top executives.
  Decentralization allows delegation of power to subordinates. So the top management will not have to do all the decision making work.

• Decentralization enables quick decision making.

• It is difficult to hack a decentralized system, therefore, there is a high level of security.

• Ensures better control and supervision
  The subordinates have the authority to make independent decisions.

• Transactions are more effective in a decentralized system

Disadvantages of decentralization

• It is difficult to follow uniform policies and standard procedure in a decentralization system.

• Lack of proper coordinations

• It requires qualified personnels. Absent of these trained personnels the system is useless.

• More money is required to run a decentralized

• If the system is not properly managed, much conflict exist.

Thank you so much for going through my post. I'm grateful to @benton3 and @steemkidss for this wonderful opportunity to learn for free.
I enjoyed this week's class a lot.