Centralization refers to the process by which the decisions within an organization are determined by a selected group of individuals. In many situations, managers at the top level of a business hold all of the decision-making power. However, it is also possible for the top managers to elect lower-level employees to speak on their behalf and have a voice in making decisions. There are certain advantages of centralization in many scenarios. For instance, managers at smaller firms may prefer this method because they personally oversee all activities within the organization, so they are in a much better position to make a decision that is in the best interest of everyone.
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