Answered Essay: What is the difference between a decentralized architecture and a centralized architecture?

What is the difference between a decentralized architecture and a centralized architecture?

Expert Answer

Organizational structure refers to the structure that coordinates and motivates employees to work together in meeting organizational goal. It helps in deciding about the reporting relationship and the tasks performed by each.

Organization structure can be centralized or decentralized. In centralized structure, the important decisions are made by higher management. Decentralized authorities are the authority where the decisions are made by middle-level and superior-level managers. The decision making power is delegated to everyone.

The difference between a decentralized architecture and a centralized architecture are: –

  • In decentralized architecture, the authority of taking business decisions are available to several individuals in the organization and don’t rely on higher management for decision making process. In centralized architecture, higher management are efficient in taking important business decisions.
  • Decentralized architecture helps in reducing the burden of top management whereas In centralized structure, the Business owners are responsible for developing mission and vision which is followed by managers and employees to achieve these goals.
  • In decentralized architecture, inexperienced employees may not take appropriate decisions. This can impact the organization negatively. In centralized structure, business owners take prompt decisions and react quickly to dynamic market place.
  • In decentralized structure, the communication is effective. In centralized architecture, the communication system will be ineffective because the quality of communication up and down the hierarchy will be very limited.
  • Decentralized structure motivates employees as they are the part of decision making. Centralized structure creates inflexible and rigid work environment as the employees need to take approval from head office.
  • Decentralized structure leads to business politics, conflicts and unhealthy competition between lower level employees. In centralized structure, companies experience less conflict as decisions are taken by higher management.
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