# Decentralization Compared to Centralization



## serenesam (Jul 26, 2011)

I recall from several university textbooks that decentralization is better than centralization. I am present to argue that this is a bunch of baloney. I will start with my personal experience in the banking industry having had several supervisors and various other superiors. I have noticed that while feedback is usually welcomed and encouraged, at the end of the day, you will have to listen to the orders of your superiors. All that stuff that you may have heard regarding 360 degree feedback is also a bunch of nonsense. Remember that some of your superiors, especially the ones who have worked there for many years will try to retain a certain sense of control and power as they may subconsciously believe they are entitled to it. After all, if they have had so many years of experience, they are more likely to believe that their approaches and/or methodologies are the best ones.

Another great example showing how centralization will usually have the upper hand over decentralization is the website where students rate their professors. Notice how the professors with happy faces usually retain the very same consistency year after year and the same is true with the professors with sad faces. Filling out feedback forms is simply just a waste of time as you can see the almost non-changing ways of how a particular professor is going conduct his/her class. We don’t even have to talk in figurative speech to know that the feedback given to a professor is likely to go in one ear and out the other ear. I am not saying that all professors are this way, just that it appears that most of them are this way.


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## tanstaafl28 (Sep 10, 2012)

May I suggest you provide a brief description/definition of the two terms before launching into your argument? This will allow those who don't know as much about them to join in.


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## serenesam (Jul 26, 2011)

tanstaafl28 said:


> May I suggest you provide a brief description/definition of the two terms before launching into your argument? This will allow those who don't know as much about them to join in.


Sure, decentralization is defined as *the process of redistributing or dispersing functions, powers, people or things away from a central location or authority. 

**Centralization, is the process by which the activities of an organisation, particularly those regarding planning and decision-making, become concentrated within a particular locationand/or group.*


In human resources or industrial psychology, *360-degree feedback, also known as multi-rater feedback, multi source feedback, or multi source assessment, is feedback that comes from members of an employee's immediate work circle. Most often, 360-degree feedback will include direct feedback from an employee's subordinates, peers, and supervisor(s), as well as a self-evaluation.*


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## tanstaafl28 (Sep 10, 2012)

The popularity of decentralization would seem to me to be the dispersal of responsibility such that, in a bureaucratic sense, any one person cannot be blamed when something goes wrong.


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## serenesam (Jul 26, 2011)

tanstaafl28 said:


> The popularity of decentralization would seem to me to be the dispersal of responsibility such that, in a bureaucratic sense, any one person cannot be blamed when something goes wrong.


:laughing:

Good one. I would suspect within the educational system, teachers get blamed by their superiors for student's poor performance. There is this phenomenon in social psychology called the "diffusion of responsibility." It just seems when you have a lot of people involved, like subordinates, supervisors, executives, people don't want to take responsibility. It like a CEO or a CFO saying, "I don't know what happened. It's not my fault."


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## tanstaafl28 (Sep 10, 2012)

serenesam said:


> :laughing:
> 
> Good one. I would suspect within the educational system, teachers get blamed by their superiors for student's poor performance. There is this phenomenon in social psychology called the "diffusion of responsibility." It just seems when you have a lot of people involved, like subordinates, supervisors, executives, people don't want to take responsibility. It like a CEO or a CFO saying, "I don't know what happened. It's not my fault."


Indeed, look at the whole mortgage/housing/bank collapse of 2008. Are you aware of anyone in the American banking industry, brokerages, or insurance companies, who were prosecuted for fraud, deceptive lending practices, or violations of the Securities and Exchange Act? It seems to me that decentralization (and government corruption) kept them from being blamed for what amounts to a huge economic Ponzi scheme. 

These industries wrote millions of bad mortgages to people who really could afford them, then they broke up and "packaged" those mortgages in with better ones (so they all would get a better rating), then they sold and traded them as if they were worth money, and they also allowed other investors to bet AGAINST them, meaning they would only get paid if the the homeowners defaulted. It was a tangled mess of their own creation and not one of them got busted for it. 

That's why decentralization is being lauded, IMHO.


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## jbking (Jun 4, 2010)

Actually, I'd argue that depending on the context, centralizing or decentralizing can make a lot of sense.

I'm not sure I'd like the idea of having tribal warfare back again if military power were decentralized. By having a clear chain of command, this makes sense to have one head. Similarly, if each US state printed its own currency, I'm not sure how great that would turn out in trying to decentralize the money supply away from the Federal Reserve. Those would be my arguments for having some things be centralized and it works well.

At the same time, there are various other situations where decentralized works better. Decentralized version control systems are starting to take off and can be an interesting example to consider. Similarly, the idea of self-organizing teams using Agile software development methodologies would be another situation where things are more distributed rather than concentrated. Lastly, note that you are picking anecdotal components rather than supplying raw data to back up your story.


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## Stelmaria (Sep 30, 2011)

The problem is that you are treating this as an either/or, without really understanding that it is contextual, based on the nature of an issue, information flows (potential and actual), as well as the capacity for problem solving (I look at it in a computational sense).


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## Dr.Horrible (Jul 12, 2012)

decentralization=more local representation
centralization=authoritarian,top down ruling type government 
centralization is equal to micromanaging...it never works


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## ThatOneWeirdGuy (Nov 22, 2012)

Centralization and decentralization both have their merits. In general, latter more than the former. Your bank teller example might have been a good example where centralization would work. However, decentralization would work a lot better in a situation, where say a team of engineers are working on some project. Most of the engineers have 15+ years of experience and they all know what they're doing and will see that the final product is the best that it could possibly be. But the good people up in management, who didn't study engineering and aren't aware of the work environment of the employees, stuff like that, implement a bunch of BS policies that are simply a nuisance or even a hindrance to the engineers. In the end, the engineers get stressed out, the ones who can easily get a new job do so, etc, and, as a result, the finished product is less than what its potential could have been.

Had the The Man allowed the engineers more freedom, less guidelines and progress surveys, the finished product would have been a lot better, which would have pleased everyone. Kind of a vague and mediocre example, but you get the point.


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## RobynC (Jun 10, 2011)

It's bad to have too much power in too few hands... How's it working for us now?


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