Question

Centralisation refers to

• A. Retention of decision making authority
• B. Dispersal of decision making authority
• C. Creating divisions as profit centres
• D. Opening new centres or branches

Hint:

In a centralized organization, decision-making authority is concentrated in the hands of top management.

Answer 1

The Correct Option is A

Step 1: Understanding centralisation.
Centralisation refers to the concentration of decision-making authority at the top levels of the organization. This means that the senior leaders retain control over major decisions, rather than dispersing authority to lower levels.
Step 2: Analyzing the options.
(A) Retention of decision making authority: Correct. Centralisation is characterized by the retention of decision-making authority at the top of the hierarchy.
(B) Dispersal of decision making authority: Incorrect. This is the definition of decentralisation, not centralisation.
(C) Creating divisions as profit centres: Incorrect. This is related to decentralisation and managing financial responsibilities at the divisional level.
(D) Opening new centres or branches: Incorrect. This is a strategy of expansion, not a definition of centralisation.
Step 3: Conclusion.
The correct answer is (A) Retention of decision making authority, as centralisation focuses on keeping decision-making power at higher levels in the organization.