DECENTRALIZED AND CENTRALIZED SYSTEM OF BUSINESS
Business is an establishment or firm set with the aim of making profit and maximise such profit as well. Though at times business men risk and lose what they have invested instead of gain but the main focus is to make profit.
To grow up a business, business men needs to do survey and see the market niche of the people and their readiness to purchase the supplies therefore making sure that demand curve meet the supply curve at equilibrium.
Looking at the area where availability and readiness of people to patronize the goods and resources available. The readiness of employees ready to take initiative and their own decisions all count for the move of a firm hierarchy moving centralised or decentralised.
Another area is the leadership style and communication that may exist between the employers and the employees.
📝 DECENTRALISED SYSTEM OF BUSINESS
This system involves the process whereby a business system or model allows the decision making power lies across all sectors and levels in the firm.
The Managing Directors and the Chief Executive Officers do not take the entire decision for the organisation but the lower rank officers are allowed to have the decision making power to analyze, decide and make decisions in conformity to the goals and objectives of the business or firm.
📝 CENTRALISED S YSTEM OF BUSINESS
This process however is the direct opposite of the decentralised system here the decision making power lies in the hand o the office thus informations are from one pivot or source which run down to all levels without the lower officers taking part or making any meaningful contributions in the decision making process.
For example, in this system, the board of directors or the office to the firm has the right to make and amend decisions.
📝 THE DIFFERENCE BETWEEN THE TWO SYSTEMS
The difference includes
I. Decentralised system supports democracy or democratic rules whiles the Centralised support autocratic rules
Ii. Decentralised allow workers to share ideas but autocratic condemns idea
III. decentralised system allows employee the decision making power to make decisions but Centralised system does not.
📝 ADANTAGES OF DECENTRALISED / CENTRALISED SYSTEMS OF BUSINESS
Both systems have their good side of the coin.below are some advantages of the Centralised system of business
1. It has a clear chain of communication since all informations are carried or given to the surbodinates by the office of the company.
2 there is focused vision. The Centralised system focused mainly on the objective set without any diabolic and sobortaging since the direction is been stirred up by one person.
3 quick decision making decision making is very quick as the power lies in the office and the employers alone. No one is allowed to share ideas when taking decision and so therefore taking decision is very
4Centralised system of business improves quality of work and there is high output of work among employee since the system doesn't encourage lazy attitude to work. Though officers of this system may practise the theory Y system of leadership yet they exhibit high rate of theory X system where managers use by all means method to get their workers work to maximize production
5 there is cost reduction in this system. Managers do not wait too much resources financially to achieve their goals. Since all commands are from the office less amount of money are used.
ADVANTAGES OF DECENTRALISED
The following are some advantages of the decentralised system of business.
1Different views and ideas are been shared on decision making. A common dirge in Akan say "wisdom is not in one man's head" meaning no man one earth possess all wisdom. So on this system since decision taken is by concensus Different ideas and solutions are gotten as to how to achieve a goal.
2 decentralised system of business reduced burden on top Executives or the office. Onlike the Centralised system here the office are allowed to take major decisions for the firm and allows the employees on the other levels to take minor decisions. When this happens the office of this system are not over burden in their quest of offering day to day administration of the firm.
3 it promotes motivation for the employees both intrinsic and extrinsic motivations. People are delighted to work freely even with or without supervision from supervisors because they feel that their presence and knowledge are welcome by the office of the employer therefore they need no specific or special motivation before they can work.
4 the decentralised system of business facilitate diversification of ideas and talents among the employees.
Though in one firm the employees have their unique talents and abilities that when they are allowed and empowered they can bring Different ideas and ways of arriving to a solutions to the attainment of goals and objectives of the firm.
5decentralised system of business prepared for emergency. There may a time where the employer or the manager be may taken off duties like attending to meetings, on leaves, travel or sick. This system provide a clear better arena for self sustaining because the next to rank in office or an employee can volunteer to act in his absence and keep the firm moving.
📝 DISADVANTAGES OF DECENTRALISED AND CENTRALIZED SYSTEM OF BUSINESS
The following are some disadvantages of the Centralised system of business.
A it slows down production and work since every major decisions must come from the office to the employees, when decision are not return employees feel uneasy to take initiative to work and therefore may decide to wait until there is an order from above this may slow down production .
B lack of loyalty among fellows since initiatives are not welcome in this system, the employees will not willingly and devotionally dedicate and devote themselves to work.
C bureaucratic is high in this system. The managers turn to become dictators or actors in the firm and the employees becomes spectators in the film without much contribution to decision making.
D in this system, the employee are like the remote control. The employees have lack of self control since they are used on the direction the office so wished. like the remote, as they are pressed or ordered they function accordingly.
E this system promote laizy faire attitude among the employees. In the absence of the manager, employees will not work but will be seen working only in the presence of the manager or control from the office.
Decentralised system on the other hand have the following as their flaws.
A this system increase high expenditure. Since more people are allowed to take initiative and decision for the film more resources are thrown into it to factor the need and expenses for all contingencies.
B there are several uniformed policies in this system. Since decision making power lies in all employees, decision may not be uniformed and standardized since every manager may take his own decisions.
C there is high sense of conflict among members, subordinate managers and the top hierarchicals . Since the top always put pressure on the department, they always lay more emphasis on their own decisions to maximize profit.
D there is high financial burden on this system of business since a lot have to be put in in getting officers for all departments, renumeration and high rate of salary payment since it high demand of labour force.
E there is delay in decision making since the system is democratical, decision are at times delayed in it process before arriving at its final decision.
📝 WHICH OF THE SYSTEMS OF BUSINESS IS BETTER
Each of the system can be better depending on how is it been practicalise.
Each condition may determine the kind of system that must be deployed in order to arrive at a goal.
Both sides have strength and weakness which weight each other and there it must be utilise only when is applicable.
✍️ IS BLOCK CHAIN A DECENTRALISED SYSTEM
Block chain can really be a decentralised because decision making power and been delegated from the Centralised entity to a distributed individuals and network . This is so because trademarks are giving to individual which has reduced stress and and trust. Block chain as a networking has to do with three primary source as in the case of each network the source, distribution and the receipt the block chain permit individual network s to distribute receipt for all beneficiaries.
📝 CONCLUSION
We have look at the meaning of DECENTRALISED and Centralised systems of business how it works interns of their differences
Again we weigh both coin and draw out their advantages and disadvantages through which we found out that both are better depending the situation and how it is used.
We compare it to block chain and we discussed that it is a DECENTRALISED networking where decision making process are been carried of by the individual network who are empowered for distribution of data