The degree of centralization in an organization affects all other aspects of organizational life. Traditional management approaches have stressed how top managers exercise their powers in the interest of economy, efficiency, or effectiveness. The easy assumption of this thinking has been that it is entirely appropriate to centralize authority in an organization.

Especially in recent years, however, much has been said, written, and accomplished in support of the value of decentralization in administration. It is useful to understand what each concept means before going on to discuss why decentralization has become so much more acceptable. Decentralization is an organizational pattern focused on distributing power broadly within an organization.

In its extreme form, centralized management means that all essential decision-making and implementation are the concentrated responsibility of those at the top of the organizational hierarchy. Communication and coordination become one-way streets, from the top down (except for structured feedback). Nothing of any consequence goes on that is not under the direct control of top management. Some entities still function in this way, but many others at all levels of government and in the private sector do not. As the scope and complexity of many organizations have increased, it has become necessary to delegate considerable amounts of operating authority to line managers.

The decentralization of decision-making authority effectively responds to employee interest in having a larger voice without forcing top management to relinquish command authority or oversight capacity. Concepts of citizen participation, neighborhood empowerment, and community activism trace their origins in part to congressional decisions intended to broaden opportunities for citizens to become less dependent on government. Although ultimate policy and administrative responsibility remain with top managers, many day-to-day operating decisions are delegated to others at lower ranks within the organization.

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