What is the difference between centralized or decentralized decision making? 

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litteacher8 eNotes educator| Certified Educator

Centralized decision making means that all decisions are made by management, and employees follow them.  Decentralized decision making means that some decisions are made at several different levels, including lower management.

authority is retained by the top management for taking major decisions and framing policies ... [the rest of the] authority may be delegated to the middle level and lower levels of management.

In a company with centralized decision making, everything is top down.  Consider McDonald’s, which is famous for having very specific procedures for just about everything.  Someone higher up conceives of policy and the employees follow them.  In a company with decentralized decision making, middle and lower level management make some decisions.