Degree of Centralization states that the amount of decision-making power vested in top management should vary by circumstances.
What is Degree of Centralization?
- Choosing the level at which decisions should be made inside the business is the last step in creating a successful organizational structure.
- The degree of formal authority concentration in one division or level of the organization is known as centralization.
- With limited input from lower-level employees, senior management makes the majority of the important choices for the business in a structure that is extremely centralized.
- Top managers can establish a comprehensive perspective of operations and implement strict financial controls thanks to centralization.
- By removing duplication inside the business, it can also aid in cost reduction.
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