Question

Centralisation refers to
A. Retention of decision making authority
B. Dispersal of decision making authority
C. Creating divisions as profit centers
D. Opening new centers or branches.

Answer 1

Correct Answer - (a)
Centralization means concentration of authority at the top level of management. Fayol suggests that an appropriate balance should be maintained between centralization and decentralization. The degree of centralization and decentralization will depend upon several factors such as size of the organisation, competence of top managers, ability of subordinates, etc. therefore we choose option a.