Centralization and decentralization in management have been the subject of extensive research at the scientific level. Management specialists have demonstrated the benefits of decentralization in the growth of the establishment or entity that adopts this management style, assuming the necessary conditions for success are present. What concerns us here is the relationship between centralization, economic costs, and the killing of creativity, which is considered the most important factor in achieving economic success and economic efficiency for any entity that adopts decentralization.
\nThe concept of centralization, in short, depends on the concentration of powers in the hands of a limited number in the commercial establishment and the government sector, and the stripping of powers from the rest of the employees, no matter how high their status is, which leads to the concentration of decisions in the hands of a limited number who allowed themselves to monopolize decisions under the pretext of their direct responsibility to the relevant authorities or their ownership of the establishment. In most cases, powers are concentrated in the hands of the first official in the government or private sector, to the point that he is the one responsible for signing the vacations of employees of all job grades! In most cases, their motive for doing so may be justified or unjustified. For example, the lack of governance, systems and laws that define the role of each official within the apparatus and the limits of his responsibility, and the punitive and penal systems in the event of a violation, contribute to the fear of senior management and the concentration of powers in its hands. Also, the weakness of the judicial and executive bodies in implementing the rulings issued against those who exploit powers, prevents many establishments from granting powers to those below the first official. However, in many cases, these necessary conditions for the transition from centralization to decentralization are available, and yet senior management hesitates to delegate powers for personal reasons (private interests that the official gains from the concentration of power in his hands) or lack of trust in those below him in the job hierarchy or their incompetence, or human nature in loving domination and feeling important, because there is no one in this establishment who can make a decision without his approval and blessing, everyone is at the mercy of his decisions, or it is a result of all of what was mentioned! Centralization,
\nwith what it means in terms of withdrawing powers and freezing decisions except after the approval of the person concerned, leads to the complete killing of creativity except in the person with the authority, a decrease in work efficiency and an increase in economic costs. Centralization leads to freezing the competencies in the facility until after the blessing of the person in charge. Instead of having a larger number of creative people in the facility, their potential is frozen except through the person in charge. This inevitably leads to a lack of desire for creative participation in the facility. If the facility is large, the creative ideas that are sent to the first official to obtain his approval take a longer time before they are approved, which may deprive them of their competitive advantage in the meantime. This constitutes an obstacle to participation. The time taken for any process represents an economic cost borne by the facility. In the case of centralization, any official within the device must address the first man in the administrative apparatus in which he works to obtain approval, which takes a longer time than the normal case in the event that this person obtains his responsibilities.
\nThe final result of centralization is the killing of creativity within the apparatus, as the implicit message sent by the top official in the apparatus to the rest of the officials is the lack of trust in their decisions and scientific capabilities and the limitation of that to his honorable person. This indirect message is negatively reflected on loyalty within the apparatus and the desire for active participation and creativity. It also leads to an increase in unjustified economic costs borne by the establishment due to the time it takes to complete any task, and the need for a larger number of employees for the incoming and outgoing within this apparatus, which negatively affects the economic efficiency of the establishment, as the establishment bears higher costs for the same outputs. While in the case of decentralization and the absence of such additional costs, the establishment can reach the same amount of production of outputs at lower costs.
\nIn the event that centralization is the prevailing situation that spreads among its governmental and private production institutions, especially in the governmental sector, the entire society bears additional costs because of it, which is reflected in achieving less economic growth, weak competitiveness at the local and international levels, poor services provided by these entities, and limiting the potential and capabilities of society. To encourage the trend towards decentralization in private and governmental entities, the regulatory authorities in the country are required to put in place systems and laws that encourage such a move. The low economic cost borne by the establishment from prosecuting those who abuse their powers, and the ease and speed of enforcing judgments against them, contribute to the establishments\u2019 tendency towards decentralization for the economic benefits they reap from such a move, which increases the efficiency of the local economy and reduces the costs borne by society. Therefore, the government is also required to move towards decentralization and put in place strict punitive systems for those who abuse the powers given to them and implement them. There is no point in burdening society with unnecessary economic costs due to government centralization, which is one of the reasons for the weakness of government agencies and their low efficiency.<\/p>\n","protected":false},"excerpt":{"rendered":"
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