What are the advantages and disadvantages of centralised management?

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What are the advantages and disadvantages of centralised management?
Centralised management is a unique business plan with advantages and disadvantages. (Getty Images)

The nature of centralisation of a management style is centred on where the decision-making focus is located within a group. If the decision-making focus is located at the top of a group, usually within the hands of a few individuals, it is considered to use a centralised management style, according to the Dot Boston website.

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Crisis management

One advantage of centralised management is seen during times of crisis within a group. Centralised management structures can more easily address a crisis situation, including making decisions to reduce the damage, addressing the press with a unified message and handling crisis resolution internally, says Dot Boston. Other areas of a group can continue working while their upper management focuses on addressing the crisis situation. Additionally, a centralised management organisation can increase its resiliency by removing or reorganising their upper management in response to a crisis while the rest of the organisation remains mostly unaffected.

Organisational disconnect

A disadvantage of centralised management is the disconnect that employees feel toward the organisation due to their lack of contribution. Employees will grow, adapt and learn as they work within an organisation and often have individual contributions that they would like to make to the improve the group as a whole, says Dot Boston. If they do not have an avenue by which their suggestions can be heard, they can grow to feel disconnected from their management and lose their motivation for organisational improvement. This disconnect fosters a feeling of apathy toward company success.

Standardisation of procedures

Another advantage of centralised management is the overall standardisation of procedures and quality control requirements. These standardisations allow upper management to set the standards that will be followed in every facility and every group within the organisation, reducing costs and increasing quality, says Learn Management. Additionally, this allows for a unified quality expectation throughout an organisation.


A disadvantage of centralised management is the distance between the decision makers and the on-site expertise of their employees. Those on-site employees have direct understanding of the specific problems and necessities of their areas. Centralised management does not give those employees the ability to share that expertise with the decision makers, or if the connection is made, the time it takes between the employee noticing a potential improvement and it becoming policy can be years, says Learn Management.

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