means that decision authority is located near the of the organization.
a. Decentralization; top
b. Centralization; top
c. Span of control; top
d. Centralization; bottom
e. Span of control; bottom
The Correct Answer and Explanation is:
Correct Answer: b. Centralization; top
Explanation
The correct answer is centralization; top because in a centralized organizational structure, decision-making authority is concentrated at the top levels of management. This means that senior leaders or executives at the highest level make the key decisions for the organization, rather than delegating this power to lower levels or individual departments.
Centralization refers to the degree to which decision-making authority is restricted to higher levels in the organizational hierarchy. In a centralized organization, top executives retain authority and control over most decisions, leaving little autonomy to middle or lower-level managers. This approach helps ensure consistency and uniformity across the organization because decisions are made by a few individuals who are often more experienced and better informed about the organization’s overall strategy.
There are several advantages to centralization. It can lead to more efficient decision-making when top leaders have a clear vision and strong leadership skills. It also ensures standardization of policies and procedures, which can improve quality control and alignment with organizational goals.
However, centralization can also have drawbacks. It may slow down decision-making, especially in large organizations, because every decision must go through the top. It can also lead to reduced motivation or innovation at lower levels, as employees may feel they lack the authority or autonomy to contribute meaningfully.
In contrast, decentralization is when decision-making authority is pushed down to lower levels in the hierarchy, giving more power to departments, teams, or individual employees.
The other choices, such as span of control, refer to the number of subordinates a manager supervises and do not directly relate to the location of decision authority.
Therefore, the phrase “decision authority is located near the top of the organization” best describes centralization, making option b the correct answer.
