Big encyclopedia of oil and gas. Centralized and decentralized organizations
In many areas of life there are such concepts as centralization and decentralization.
These concepts entered written English at the beginning of the 19th century, when a French politician first described in his article the existing centralization of bureaucratic power and the efforts of citizens towards the decentralization of government functions. During the 19th and 20th centuries. the ideas of freedom and decentralization reached their apogee thanks to the political movements of the anarchists.
At the beginning of the 20th century. in response to the centralization of economic forces and political power, a decentralist movement emerged. His main message was to blame industrial production for the destruction of middle-class shopkeepers and small factories, and to promote greater opportunities for property ownership and a return to life on a small, local scale.
Within the framework of a systems approach, decentralization should be understood as such a reorganization of ongoing intrasystem processes, in which a significant part of them is transferred to a lower level of the hierarchy. In other words, this is the transfer of powers and responsibilities for decision-making from the center to other, less significant organizations, while simultaneously narrowing the rights and powers of the corresponding center.
Describing decentralization in simple words
In simple terms, decentralization is the redistribution of power. All the power that only the center possessed begins to disperse across the regions into places.
In conditions of decentralization, the rights, powers, and capabilities of localities, departments, regions, autonomies, and republics are expanded and strengthened. That is, if all decisions were made in one place by the leader, head, boss, director or manager, then with decentralization, subordinates are also given some power, freeing their management from some functions.
And even simpler - the power that belonged to one person, in conditions of decentralization, begins to belong to many people.
Decentralization - information from Wikipedia
Decentralization in production
In an enterprise, decentralization is characterized by the degree of power that the head of the organization has. Strong centralization in an enterprise is a pronounced unity of command. In such organizations, as a rule, the main factor for success is high discipline, and decision-making occurs all the time in the same way, according to a standard scenario.
However, modern market relations require flexibility and efficiency in decision-making related to issues of product sales, customer service, and the development of company tactics. Current business conditions show that the most viable and competitive organizations are those with a greater degree of decentralization. Under the conditions of such a structure of distribution of power, employees involved in the sale of goods and services are endowed with powers that allow them to independently make the necessary management decisions.
Typically, a manager at a decentralized enterprise, without coordination with senior management, quickly resolves emerging issues, thereby ensuring an increase in the speed of production processes and the implementation of reactions to external factors. This has a beneficial effect on the final production result.
In decentralized enterprises, collective decisions play a significant role. It often happens that in order to solve the current situation, the opinions of specialists from different professional fields are required, and with an integrated approach to the problem, a reasonable way out of the current situation is found. A balanced collective decision can be an effective tool in dealing with emerging problems.
Enterprises with the described management structure have the following characteristics:
- decisions made by lower hierarchical structures are more significant;
- the performance of organizational functions occurs in accordance with the decisions made by the departments;
- control from central management over the actions of lower hierarchical structures is quite low.
A high degree of decentralization in an enterprise contributes to:
- increasing management skills of managers;
- increasing skills for competitiveness in modern market conditions, promoting economic growth and improving labor productivity;
- independence of management, starting from middle management, in solving emerging problems, which leads to awareness and assessment of their own contribution to obtaining results and is a significant additional motivation for their work.
Decentralization in the economy
A market economy must be partially decentralized, since it is characterized by a free regime of economic activity of citizens and their associations, independent of regulations and instructions from above.
A decentralized economy in market conditions should not be burdened with a state plan established by the center, which is unconditionally subject to implementation. Instead of a mandatory one, there is an advisory forecast plan that the ministry offers to the regions. There is not only a restriction of the rights of the central state or other governing apparatus, but also a delegation of planning and management powers to economic units, granting independence in decision-making, as well as in the tactics and strategy of their actions.
However, to avoid chaos and complete discord, a market economy must be controlled and directed, so complete decentralization of the economy is neither possible nor desirable. The country's economy must have a system of rules of economic behavior that is common to all participants in the economic process.
Decentralization in government
The process of dispersing power from the center to regions and establishing local self-government by receiving part of the powers from the central government is decentralization.
This mechanism is beneficial in the case of a harmonious relationship between the center and the regions. Decentralization in government is the transfer of responsibility for planning, management and use of resources from the central government apparatus to lower levels.
Decentralization is closely related to the distribution of functions (or tasks) among the lowest levels of the social order that are capable of performing them.
The principle of subsidiarity– one of the most important principles for distributing social assistance as needed between departments. It is this principle that forms the basis of the European Charter of Local Self-Government. An important fact is that not all management functions should be transferred locally.
Based on the principle of subsidiarity, decentralization is worthwhile if it is extremely important for achieving the set goals and there are guarantees of their effective implementation and improving the quality of management.
Differences between decentralization and federation
A decentralized state, where the powers of the central apparatus of power are largely transferred to its constituent parts, occupies an intermediate place between unitary and federal states. It is to some extent similar to the federal structure of the state, which consists in endowing the administrative-territorial unit with the right to legislate, be financially independent, as well as the possible presence of autonomy in its composition.
But there are significant differences between these two control systems.
Federalism is a system of government in which both the national government and the regional government have power. Here there is constitutional recognition of the autonomy of the regions with protection from attacks on their sovereignty by the central government.
It can be part of the policy of both a unitary and a federal state. Decentralization provides for the autonomy of regions in accordance with adopted laws; the supreme power can decide when and what powers to transfer to the regions, and can take them back at any time. In this case, most of the taxes collected in administrative-territorial units are transferred to the central administration, the powers of the regions are small, and everything must be asked from the main leadership.
Pros and cons of decentralization
Advantages
- Strengthening local democracy. Department managers have a significant amount of information about local conditions to make decisions. There are no costs for its transfer from central management; everything happens at the local level.
- Improving socio-economic development, taking into account socio-territorial interests, policy is more accurately adjusted taking into account emerging conditions.
- Local managers make more timely decisions, which is most attractive to customers. The activities of managers are most effective due to the fact that they can take initiative, acquire valuable experience through trial and error, and develop managerial talent. The ground is emerging for the cultivation of new administrators and talented civil servants. Management costs are reduced.
- Ensuring freedom and human rights through the opposition of the parties.
- Focusing the knowledge and skills of senior management on strategic planning issues by transferring the burden of day-to-day problem solving to field managers.
- Allows you to establish a more flexible regulatory system without the bureaucracy characteristic of centralized management.
Flaws
- Making incompetent decisions by department managers due to a lack of information, lack of consistency of goals between departments, etc.
- Duplication of functions performed.
- Decreased loyalty to other divisions of the overall whole.
- Separation of parts, which leads to conflicts and weakening of control.
- The presence of a tendency to drag the controlled process into anarchy and disorder.
Consequently, decentralization clearly reflects the nature of the relations between managers at various levels in the management system, be it any area of economic activity, an enterprise, an economy or a state. This is a new quality of management that allows you to get as close as possible to a positive result.
The significance of decentralization lies in the impossibility of resolving all issues arising from departments from a single center. To achieve this, powers are distributed among structural units that have sufficient capabilities to solve their own problems.
With departmentalization, the question of how to divide the activities of the organization’s employees horizontally, i.e., becomes especially important. determine the tasks that each structural unit must solve. Another important point in building an organization is the division of work vertically. Decide, in which element hierarchical structure, the most important decisions must be made - the business of the organization's leadership. This determines the form of the organizational structure and the effectiveness of management decisions. The manager must delegate to the subordinate the amount of authority that the latter needs to solve the tasks assigned to him. If the rate of control becomes high, then additional levels of control must be introduced to prevent loss of coordination.
Organizations in which senior management retains most of the authority needed to make critical decisions are called CENTRALIZED . DECENTRALIZED ORGANIZATIONS - these are organizations in which powers are distributed among lower levels of management. In highly decentralized organizations, middle managers have greater authority over specific areas of activity.
Degree of centralization In practice, however, there are no completely centralized or decentralized organizations. Such organizations represent only the limiting points between which lie all types of structures encountered in practice. The degree of centralization varies from an organization where most of the authority required to make critical decisions remains at the highest level of management, to an organization where most of such rights and authority is delegated to lower levels of management. The difference lies only in the relative degree of delegation of rights and powers. Therefore, any organization can be called centralized or decentralized only in comparison with other organizations or in comparison with itself, but in other periods.
To understand how centralized an organization is, you can determine the following: characteristics:
1. Number of decisions made at lower management levels . More decisions made by lower-level managers - a greater degree of decentralization.
2. The importance of decisions made at lower levels . In a decentralized organization, middle and lower level managers may make decisions that involve the expenditure of significant resources.
3. Consequences of decisions made at lower levels . If lower-level managers can make decisions that affect more than one function, then the organization is decentralized.
4. Amount of control over the work of subordinates . In a highly decentralized organization, senior management rarely reviews the day-to-day decisions of the managers under them, under the assumption that all those decisions are correct. Evaluation of management's actions is made based on the results achieved, especially the level of profitability and growth of the organization.
Within an organization, some departments may be more centralized than others.
When we talk about a given degree of centralization or decentralization, we define the degree to which top management delegates decision-making authority to lower levels of management in areas such as pricing, product development, marketing, and operational efficiency of structural units. Even in highly decentralized organizations, management reserves the right to make decisions on issues such as defining the overall goals and objectives of the organization, strategic planning, and formulating firm policies.
Factors determining the degree of decentralization
Decentralized structures have many supporters. This is partly due to the idea that people have an inherent ability to successfully cope with assigned tasks, and partly due to the numerous evidence of the effectiveness of such structures. One of the most compelling pieces of evidence was presented by Peter Drucker. He was one of the first to study the experience of creating a decentralized organization: the decentralization of General Motors undertaken by Alfred P. Sloan. Based on the apparent success of decentralization, Drucker concluded that “the cardinal rule for any organization is to involve least number of management levels and create the shortest chain of commands.”
Most large corporations have a decentralized organization. Their general structure is based on the principle of federal decentralization, in which the heads of the most important departments can act almost autonomously in everything that concerns the products they produce. However, even ardent proponents of decentralization recognize that it is not the only solution for every situation. Both centralization and decentralization have their disadvantages.
Advantages of centralization and decentralization
Benefits of Centralization
1. Improves control and coordination of specialized independent functions, reduces the number of erroneous decisions made by inexperienced managers.
2. Strong centralized management avoids a situation in which some departments of the organization grow and develop at the expense of others or the organization as a whole.
3. Centralized management makes it possible to more economically and easily use the experience and knowledge of the personnel of the central administrative body.
Benefits of decentralization
1. It is impossible to manage particularly large organizations centrally due to the huge amounts of information required for this and, as a consequence, the complexity of the decision-making process.
2. Decentralization gives the right to make decisions to the manager who is closest to the problem that has arisen and, therefore, knows it best.
3. Decentralization stimulates initiative and allows individuals to identify themselves with organizations. In a decentralized approach, the largest division of the organization appears small to its leader, and he can understand its functioning, have complete control over it, and feel part of that division. Such a leader can be as enthusiastic about a department as an entrepreneur is about his entire business.
4. Decentralization helps prepare a young manager for higher positions by giving him the opportunity to make important decisions early in his career. This ensures an influx of talented managers into the organization. At the same time, the time frame for promotion to senior positions becomes shorter, and decentralization helps to ensure that ambitious young managers remain in the company and grow with it.
Structure Integration In order to realize the potential of specialization, management needs to introduce a mechanism for coordination and integration of all departments into the organizational structure. INTEGRATION - this is the process of achieving unity of efforts of the subsystems (divisions) of the organization to achieve its tasks and goals
The impact of integration on achieving organizational goals In order to integrate the organization effectively, management must constantly keep in mind the overall goals of the organization and constantly remind employees of the need to concentrate their efforts specifically on common goals. It is absolutely not enough for each department and each employee of the organization to work effectively on their own. Management must view the organization as an open system. The overall health of the organization will suffer if the departments are not effectively integrated into the overall structure. Moreover, it should be kept in mind that poor integration may not begin to affect the organization's performance until six months or even a year after the situation occurs.
Methods for achieving effective integration It is important to emphasize that the choice of the appropriate integration method depends on the environment in which the organization must operate. One of them is to develop appropriate rules and procedures. However, this method is effective only in conditions of a relatively stable and predictable external environment. In organizations operating in rapidly changing environments, a more effective way of integration is to establish strong personal connections and relationships, and to make greater use of organizational forms such as committees, temporary working groups, commissions and interdepartmental meetings.
In a small organization, all decisions can be made by its leader. However, with an increase in the size of the organization, the scale and complexity of the work, a situation may arise where the manager will be overloaded with decision-making, even if this is all he will do. This situation raises the question: should rights be concentrated at the top or distributed across levels of the organization? In practice, this is the dilemma between centralization and decentralization, which is a big problem in organization design.
There are highly centralized and decentralized management.
Centralization- this is the concentration of decision-making rights, the concentration of power at the top level of the organization’s management.
If, when distributing powers, priority is given to the lower levels of the management system, i.e. they are given more rights to make independent decisions, this type of management is called decentralized. Decentralization - this is the transfer or delegation of responsibility for a number of key decisions, and, consequently, the transfer of rights corresponding to this responsibility to the lower levels of management of the organization.
The concepts of “centralization” and “decentralization” are not mutually exclusive. The problem of choosing between centralization and decentralization is the problem of choosing the optimal design of the organization. “Centralization” and “decentralization” are only different ways to solve the problem of distortion of information when moving it from level to level along the “vertical” of management.
Centralization is the response of an organized system to prevent information from being distorted as it passes through an ever-increasing number of levels of management. The greater the number of levels in an organization, the greater the distortion of information passing through these levels.
Both management can be acceptable and effective under certain conditions. In vain, highly centralized management is sometimes considered as a negative option for building a management system - it all depends on specific circumstances.
That's why it's important to be clear about everything disadvantages and advantages both centralized and decentralized control (scheme). It should be borne in mind that these advantages and disadvantages can and should be differentiated according to the criterion of the scale of management, because the need and possibility of one or another type of management is largely determined by the scale at which management is carried out.
HIGH DEGREE OF CENTRALIZATION | SMALL ORGANIZATION | LARGE ORGANIZATION |
Advantages | ||
1. Clarity of coordination and organization 2. Direct control 3. Coordination and responsibility | 1 Concentration of experience - quality of fundamental decisions 2. Good coordination of work 3. Discipline and responsibility | |
Flaws | ||
1. Low initiative 2. Incomplete return of functional professionalism (performance) 3. Management overload | 1. Strengthening conservatism 2. The danger of bureaucracy is increasing 3. Reduced efficiency and flexibility | |
LOW DEGREE OF CENTRALIZATION | Advantages | |
1. Independence and initiative 2. Efficiency with good discipline and interest 3. Effect of leadership | 1. Initiative 2. Prompt response to situations 3. The organization is focused on goals and results, and not on performing functions | |
Flaws | ||
1. Difficulty of goal setting when interests change 2. Increases the likelihood of conflicts 3. The need for informal governance | 1. Danger of duplication 2. The danger of avoiding problems and responsibility 3. Difficulties in coordination and control |
It is noted that decentralization has a number of advantages . It increases the speed and objectivity of decision-making, makes the organization flexible and promptly responds to external changes, creates certain conveniences for employees and reduces the cost of office work, develops the abilities of managers and the creative, trusting principle in their activities. However, it was also noted that Decentralization also has a negative side . It can lead away from the main goals of the organization, weaken control and unity of action and, finally, can lead to the fact that a decision is not made at all.
It should also be taken into account that in real management practice there is many options both centralized and decentralized control. The degree of centralization can be different and can change in accordance with the changing circumstances of the organization's development, goals, scale, and quality of human resources.
Management can be flexible in terms of the distribution of powers, it can be built on the operational delegation of powers under certain circumstances. This is management, which is built on the provision of authority over situations and problems. There is no rigid consolidation of powers here; everything is determined by the situation. But even in this case, with any delegation, it still retains the organization and assignment of powers to certain links or officials.
Different concentrations of powers at the levels of the hierarchy determine a wide variety of types of management. It is the powers that make the system hierarchical. In a generalized view, this diversity can be reduced to the following types.
SO, according to the criterion of distribution of powers, the following types of management are distinguished.
Highly centralized management characterized by an increasing concentration of powers to the upper levels of the hierarchy of the management system. To the same extent, the possibilities of initiative and creativity and prompt response to changes in the situation are reduced to the lower levels of the management hierarchy.
Decentralized control - This is management with an extremely low degree of centralization. This distribution of powers in the management system in which the decisive level is the lower level of the hierarchy. Otherwise you can say: the main powers of the system’s life and development are transferred to the lower levels of the management system. At the same time, of course, the hierarchical structure of the management system is preserved, but at its upper levels only the powers to make individual decisions of a coordination or strategic type are concentrated.
A separate type of control can be situational management , in which decision-making authority is distributed depending on possible situations.
Main factors determining the degree of centralization or the procedure for distributing powers in the management system
Organizations evolve by making constant choices between centralization and decentralization. R. Ackoff explains the desire for centralization by the desire to coordinate the work of lower levels and use potential synergies, as well as the desire to prevent serious mistakes at lower levels of management, the consequences of which for the organization as a whole are not always visible and predictable. The pressure towards decentralization, in his view, is driven by the desire to facilitate rapid and effective initiatives and responses to change from those levels at which needs, threats and opportunities manifest themselves first, and to enrich the work of managers at lower levels of management by expanding their responsibilities.
When designing an organization, the following factors may influence the choice between centralization and decentralization.
1) scale of management. The larger the scale of management, the more difficult it is to implement centralized management. There is an overload of the central links of the information management system, insufficient elaboration of the specific circumstances and characteristics of the problem;
Enterprise size. The possible limits of an effectively managed organization have already been mentioned. Since in any case, there is a limit up to which centralization has an effect, then after exceeding this limit the question of decentralization arises.
2) Capital intensity of decisions made.In practice, companies’ regulatory documents even indicate a specific amount within which the manager can make certain decisions. Accordingly, if an organization allows a relatively large amount of this amount for the middle or lower levels of management, then it builds its activities on a decentralized basis.
3) Availability of appropriate personnel. The lack of willingness among managers at lower levels to accept greater responsibility cannot contribute to the development of decentralization processes, and can sometimes develop into hidden resistance to this process.
harmonious or disharmonious distribution of personnel by the level of professionalism in the hierarchy of the management system;
4) The striving of parts for independence. In social systems, such as an organization, the separation of a part from the whole is accompanied by the desire of this part to turn into a new whole, to become independent. The greater the difference between the former whole and the separated part, the more pronounced the tendency is.
5) the individual qualities of the manager and his work style. Management philosophy. The subjective belief of top management in one of the management approaches can hold the organization back from making a new choice for some time. For example, G. Ford Sr. is known for the fact that he was proud of his lack of any management titles other than the president and general manager of the company, and personally made as many important decisions as possible. In contrast, A. Sloan, Chairman of the Board of Directors of General Motors, brought the company to a high level when only 5% of decisions were made at the level of corporate headquarters.
6)use of technical means of information processing, presence or absence of an integrated information support system. Development of control technology. The widespread introduction of electronic information systems in organizations dramatically reduces the distortion of information and allows for a faster transition to decentralization.
-Uniformity of Policy. For example, the organization of banking or trade assumes that the same company in all its branches must build its relationships with consumers with the same quality. This, in turn, forces it to use highly standardized procedures.
-Organizational culture. The value orientations, norms and patterns of behavior acquired by an organization from the moment of its creation are, as a rule, stable in nature and cannot be ignored when choosing a designed system.
-Degree of division of labor. Highly diversified companies, as a rule, are built on a decentralized basis by product, project, customer, market, territory.
-Type of entrepreneurship. Every business has its own dynamics, characterized by different rates of change. It is known that a high rate of change is impossible under conditions of strict centralization. Thus, computer manufacturing companies are usually characterized by a high degree of decentralization in their activities.
-Changes in the external environment. State policy in the field of demonopolization, taxation, etc. may contribute to the development of one of the processes under consideration.
These factors act in conjunction and can determine both the need for increased centralization and the need for decentralization.
Centralization of management should be in the area of regular assessment and monitoring of management development trends. It has a significant impact on the flexibility, efficiency and innovation of management, the formation of corporate culture, and the creation of a favorable socio-psychological climate.
With departmentalization, the question of how to divide the activities of the organization’s employees horizontally, i.e., becomes especially important. determine what tasks each structural unit should solve. Another important point in building an organization is the division of work vertically. It is up to the top management of the organization to decide where in the hierarchical structure the most important decisions should be made. This determines the form of the organizational structure and the effectiveness of management decisions.
Here we consider the issue of the relative amount of authority delegated to different elements of the organizational structure. The manager must delegate to the subordinate at least the amount of authority that the latter needs to solve the tasks assigned to him. In addition, if the span of control becomes too high, then line authority must be delegated and additional levels of management introduced to prevent loss of coordination. These requirements are, however, very general in nature and there are many different ways of delegating authority depending on the specific decision that needs to be made.
Organizations in which senior management retains most of the authority necessary to make critical decisions are called centralized. Decentralized organizations are those in which powers are distributed among lower levels of management.
In practice, however, there are no completely centralized or decentralized organizations. Such organizations represent only the extreme points of a certain continuum, between which lie all types of structures encountered in practice. The degree of centralization varies from an organization where most (if not all) of the authority needed to make critical decisions remains at the highest level of management, to an organization where most of such rights and authority are delegated to lower levels of management. The difference lies only in the relative degree of delegation of rights and powers. Therefore, any organization can be called centralized or decentralized only in comparison with other organizations or in comparison with itself, but in other periods. For example, IBM has a relatively centralized management structure but is expanding its use of decentralized structures. In Europe, for example, IBM has divided all its subsidiaries and divisions into five economic centers. The heads of these centers are given very broad rights to make decisions that determine the most important economic indicators of the departments.
You can understand how centralized a given organization is compared to others by identifying the following characteristics.
1. The number of decisions made at lower levels of management. The greater the number of decisions made by lower-level managers, the greater the degree of decentralization.
2. The importance of decisions made at lower levels. In a decentralized organization, middle and lower level managers can make decisions related to the expenditure of significant material and labor resources or the direction of the organization's activities in a new direction.
3. Consequences of decisions made at lower levels. If lower and middle managers can make decisions that affect more than one function, then the organization appears to be decentralized.
4. Quality and frequency of monitoring the work of subordinates. In a highly decentralized organization, senior management rarely reviews the day-to-day decisions of the managers under them, under the assumption that all those decisions are correct. Management's actions are evaluated based on the total results achieved, especially the level of profitability and growth of the organization.
Within the same organization, some departments may be more centralized than others. Store managers and preferred tenants (for example, in the McDonald's restaurant chain) have almost unlimited decision-making power over their personnel and some discretion in choosing the products purchased. At this firm, decisions about the location of new restaurants and stores are made by middle management, while decisions regarding price levels and new product launches are made only by top management. In ordinary hospitals, administrative functions have a high degree of centralization, but the medical staff and, first of all, the attending physicians are almost completely autonomous and independent in their actions. In large universities, the degree to which a teacher has the right to change the content of the course he teaches can vary greatly across departments.
Speaking about one or another degree of centralization or decentralization of an organization, we actually determine the degree to which top management delegates to lower levels of management their authority to make critical decisions in areas such as pricing, product development, marketing and issues related to the efficiency of individual structural units . Even in highly decentralized organizations, top management reserves the right to make decisions on such issues as defining the overall goals and objectives of the organization, strategic planning, formulating firm policies in various areas, collective bargaining agreements with trade unions, and developing the firm's financial and accounting systems. Clearly, it would be foolish to allow the management of any one department to dictate how the organization as a whole should operate. For similar reasons, senior management should retain control over the costs and strategic plans of their critical departments. General Dynamics suffered huge losses due to the fact that, during a major decentralization of the management structure, the authority to resolve these issues was not left to senior management. One of the reasons that Bank of America lost almost $1 billion in 1986 was because of excessive decentralization of lending decisions. According to one study, “Bank of America is now sharply reducing the number of branches that can provide loans and is requiring senior officials at the bank's central branch to regularly review their operations.”
Although in organizations with highly decentralized structures decision-making authority should be delegated to middle management, the most important decisions in large firms are still made only by employees occupying fairly senior positions at or above the level; department management. This form of decentralization in large firms is called federal decentralization.
Soon after World War I, firms such as General Motors, DuPont, Sears, and Standard Oil of New Jersey realized the potential problems inherent in functional, centralized structures. Although functional organization and centralized decision-making have proven effective in the past, as these firms expanded their product lines, entered new areas of business, and entered international markets, senior management realized that the number and complexity of decisions they had to make exceeded their capabilities. The management of these firms came to the conclusion that in order to ensure further growth and development of the organization, as well as the effectiveness of decisions made on key issues, it was necessary to delegate some important powers to lower hierarchical levels of management. Thus, these organizations began to move to a decentralized management structure, in which top management remains in charge of deciding issues of long-term planning, distribution of company resources among departments, coordination and evaluation of department activities. Branch managers have been delegated the authority to make decisions in areas directly related to the products and services for which they are responsible.
This tendency to reorganize the structure of the company in accordance with its strategic plans is another form of manifestation of the thesis we have already cited that strategy determines the structure - a thesis that has received a lot of experimental confirmation. At about the same time and for similar reasons, several other large firms began to move to a decentralized divisional structure: Union Carbide, Westinghouse Electric, U.S. Rubber”, “Goodrich” and the chain of grocery and gastronomic stores “A&P”. However, as might be expected, this trend did not become universal, and not all firms that introduced a decentralized structure continued to move in this direction. For example, in 1976, one of the pioneers of decentralization, Sears, began to reorganize its structure towards greater centralization, which was caused by a decrease in profitability. Whereas in the existing structure most of the major decisions regarding sourcing and product advertising at Sears were previously made at the store manager or district manager level, in the new structure they must be made at the company's headquarters. Sears management came to the conclusion that this approach would allow it to better control costs and, in negotiations with suppliers, make it possible to better take advantage of the advantages associated with the size of the company and Sears' purchasing power.
In 1984, General Motors also reorganized part of its previously decentralized structure to be more centralized. The company's management believed that such a reorganization would allow it to meet the production launch schedule for new models, better control costs, tighten quality control, and help the company's branches move to producing a more diverse range of models to replace the current machines, which are almost indistinguishable from each other.
In the past, General Motors consisted of five divisions, each designing and producing its own car models. Under the new structure, the development of new modules was concentrated in two departments (rather than five): large cars and small cars. The small car division includes Chevrolet, Pontiac and General Motors of Canada, and the large division includes Buick, Cadillac and Oldsmobile. General Motors will continue to distribute its vehicles through all five locations. Thus, in this example, marketing functions remained decentralized, while production and technical policy became more centralized.
According to the results of a comprehensive scientific study, four industries have the highest degree of decentralization - transport, chemical, electrical and rubber industries. Compared to more centralized industries (food and paper industries, metallurgy and mechanical engineering), these industries are characterized by a high degree of product diversification and activity in international markets.
Decentralized structures today have many supporters. This is partly due to the idea that people have an inherent ability to successfully cope with assigned tasks, and partly due to the numerous evidence of the effectiveness of such structures. One of the most striking and convincing evidence was presented by Peter Drucker. He was one of the first to study what may be the most serious attempt to create a decentralized organization in world history: the decentralization of General Motors, undertaken by Alfred P. Sloan in the 1920s. Based on the apparent success of decentralization at General Motors, Sears, Standard Oil, General Electric, and DuPont, Drucker concluded that “the basic rule for any organization is to involve the fewest levels of management and create the shortest chain of commands.”
Clearly, many executives agree with this conclusion. Most large American corporations have a decentralized organization. Their general structure is based on the principle of federal decentralization, in which the heads of the most important departments can act almost completely autonomously in everything that concerns the products they produce. However, even the most ardent proponents of decentralization recognize that it is not the only solution for every situation. Both centralization and decentralization have their disadvantages and advantages.
Benefits of centralization.
1. Centralization improves control and coordination of specialized independent functions, reduces the number and scale of erroneous decisions made by less experienced managers.
2. Strong centralized management avoids a situation in which some departments of the organization grow and develop at the expense of others or the organization as a whole.
3. Centralized management makes it possible to more economically and easily use the experience and knowledge of the personnel of the central administrative body. Benefits of decentralization.
1. It is impossible to manage particularly large organizations centrally due to the huge amount of information required for this and, as a consequence, the complexity of the decision-making process.
2. Decentralization gives the right to make decisions to the manager who is closest to the problem that has arisen and, therefore, knows it best.
3. Decentralization stimulates initiative and allows the individual to identify with the organization. With a decentralized approach, the largest division of the organization appears very small to its leader, and he can fully understand its functioning, have complete control over it, and feel like a part of this division. Such a leader can be as enthusiastic about his department as an independent entrepreneur is about his entire business.
4. Decentralization helps prepare a young manager for higher positions by giving him the opportunity to make important decisions early in his career. This ensures an influx of talented managers into the organization. It is assumed that talented leaders are not born, but become through the process of gaining experience. Because the time frame for promotion from rank-and-file to senior positions is shorter, decentralization helps ensure that ambitious and assertive young executives stay with the firm and grow with it. 1
Quantitative indicators used to establish the internal state of an object through which an economic phenomenon is studied in management
come into contact with the totality of internal incentives of a person or group of people to activity. The state of the object determines the likelihood of achieving the goals of the entire organization in the presence of taken into account environmental factors. In this regard, we will separately consider the issue of motivation for activity in management.
When planning and organizing work, the manager determines what exactly the organization must do, when, how and who, in his opinion, should do it. If the choice of these decisions is made effectively, the manager has the opportunity to coordinate the efforts of many people and jointly realize the potential capabilities of a group of workers. Unfortunately, managers often mistakenly believe that if a certain organizational structure or a certain type of activity “works” well on paper, then it will “work” just as well in life. But this is far from true. A leader, in order to effectively move towards a goal, must coordinate the work and force people to carry it out.
Leaders translate their decisions into action by putting into practice the basic principles of motivation. In this context, i.e. in relation to management, the following definition can be given.
Motivation is the process of motivating oneself and others to act to achieve personal or organizational goals.
Carrot and stick policy. Thousands of years before the word “motivation” entered the management lexicon, it was well known that people could be intentionally influenced to successfully accomplish organizational goals. The very first technique used was the carrot and stick method. In the Bible, ancient legends and even ancient myths, you can find many stories in which kings hold a reward in front of the eyes of the supposed hero or raise a sword above his head. However, the king's daughters and treasures were only offered to a select few. The “carrots” offered as a reward for most deeds were hardly edible. It was simply taken for granted that people would be grateful for anything that would allow them and their families to survive.
Attempts to use psychological methods in management. As Taylor and Gilbert wrote, “news of Sigmund Freud’s theory of the subconscious spread throughout Europe and finally reached America.” However, the thesis that people do not always act rationally was too radical, and managers did not immediately “pounce” on it. Although there had been attempts to use psychological motivation in management before, it was only with the advent of the work of Elton Mayo that it became clear what potential benefits this promised, and also that carrot-and-stick motivation was not sufficient.
Elton Mayo was one of the few academically educated men of his time who possessed both a sound understanding of scientific management and training in psychology. He built his fame and reputation through an experiment conducted in a textile mill in Philadelphia in 1923-24. The labor turnover in the spinning section of this mill reached 250%, while in other sections it was only 5-6%. The material ways to stimulate production, proposed by efficiency experts, could not affect the turnover and low productivity of the site, so the president of the company turned to Mayo and his comrades for help.
After careful consideration of the situation, Mayo determined that the working conditions of the spinners provided little opportunity for communication with each other and that there was little respect for their work. Mayo felt that the solution to reducing labor turnover lay in changing working conditions rather than increasing remuneration. With the permission of the administration, as an experiment, he established two 10-minute rest breaks for the spinners. The results were immediate and impressive. Labor turnover dropped sharply, worker morale improved, and output increased dramatically. When the inspector subsequently decided to cancel these breaks, the situation returned to its previous state, thus proving that it was Mayo's innovation that improved the state of affairs on the site.
The spinner experiment strengthened Mayo's belief that it was important for managers to take into account the psychology of the worker, especially some of its "illogicalities." He came to the following conclusion: “Until now in social research and industrial research it remains insufficiently realized that such small illogicalities in the mind of the “average normal” person accumulate in his actions. Perhaps they will not lead to a “breakdown” in him, but they will cause a “breakdown” in his work activity.” However, Mayo himself did not fully understand the importance of his discoveries in this area, since psychology was then still in its infancy.
The first major studies of employee behavior in the workplace were a major part of the Hawthorne experiments, which were conducted by Mayo and his associates in the late 1920s. They ended almost eight years later with the realization that human factors, especially social interaction and group behavior, significantly influence individual productivity. The conclusions reached by the group working at Hawthorne allowed the founding of a new direction in management - the concept of “human relations”, which dominated management theory until the mid-50s.
However, the Hawthorne experiments did not provide a model of motivation that would adequately explain the incentives to work. Psychological theories of work motivation appeared much later. They arose in the 40s and are still developing today.
Various theories of motivation fall into two categories: content and process.
Content theories of motivation are based on the identification of those internal drives (called needs) that make people act in one way and not another. More recent process theories of motivation are based primarily on how people behave based on their perceptions and cognitions. The main process theories are expectancy theory, equity theory, and the Porter-Lawler model of motivation.
It is important to understand that although these theories differ on a number of issues, they are not mutually exclusive. The development of theories of motivation was clearly evolutionary rather than revolutionary in nature.
To understand the meaning of the theory of substantive (or procedural) motivation, you must first understand the meaning of the fundamental concepts: needs and rewards.
Primary and secondary needs. Psychologists say that a person experiences a need when he feels physiologically or psychologically a lack of something. Although a particular person at a particular time may not have a need in the sense of consciously feeling it, there are certain needs that every person can feel. Content theories of motivation represent attempts to classify these universal human needs into certain categories (Fig. 17.1.2.).
Most psychologists agree that needs can in principle be classified as primary and secondary.
Primary needs are physiological in nature and, as a rule, innate. Examples include the need for food, water, breathing, sleeping and sexual needs. Secondary needs are psychological in nature. For example, the needs for success, respect, affection, power and the need to belong to someone or something. Primary needs are genetically determined, while secondary needs are usually recognized through experience. Because people have different backgrounds, people's secondary needs vary more than their primary needs.
Needs and motivational behavior. Needs cannot be directly observed or measured. Their existence can only be judged by people's behavior. Psychologists, observing people, have determined that needs serve as a motive for action.
When a need is felt by a person, it awakens in him a state of aspiration. Urge is a feeling of lack of something that has a certain direction. It is a behavioral manifestation of a need and is focused on achieving a goal. Goals in this sense are something that is perceived as a means of satisfying a need. When a person achieves such a goal, his need is satisfied, partially satisfied or unsatisfied. For example, if you feel the need for a challenging job, this may motivate you to try to achieve the goal of getting a job that provides it. Once you get such a position, you may find that the work there is actually not as difficult as you thought. This may cause you to work less hard or look for another job where your need will be satisfied.
The degree of satisfaction obtained from achieving a goal influences a person’s behavior in similar circumstances in the future. In general, people tend to repeat behavior that they associate with need satisfaction and avoid behavior that is associated with insufficient satisfaction. This fact is known as the law of result^
The qualitative side of the characteristics of the object of interest is related to the assessment of the real economic situation. At the same time, the management system is designed to connect the external conditions for achieving the organization’s goals with the organization’s own development capabilities. At the same time, regulation and control serve as factors for adjusting pre-planned development targets. It is through control that the influence of group dynamics and leadership in the organization on the trend of positive development is reduced. To provide practical skills for these actions, we will consider the issues of regulation and control in the management system and the issue of group dynamics and leadership in the management system.
Internet program "Finding Meaning"
Topic: "Decentralization"
Issue #120
Stepan Sulakshin: Good afternoon, colleagues! Today's term, the meaning of which we will reveal, is “decentralization”. At the moment, this term is relevant because in the difficult conflict of the development of Ukrainian statehood, one of the points of conflict between the militia of Donetsk, Lugansk and the central Kyiv authorities concerns the possibilities and potential for the decentralization of public administration in Ukraine.
But in our Russian practice of state building, this topic is also relevant in the current political dictionary, since local government reforms, federalism reforms have not yet been completed, and the question of decentralization and centralization is relevant. Vardan Ernestovich Bagdasaryan begins.
Vardan Baghdasaryan: Two methodological approaches to considering the category of “decentralization” can be proposed. I'll start with the first approach. We know that there is a certain amount of managerial authority, and it is 100%. How should these managerial powers be distributed between central and local authorities? If we assume that 90% of powers are given to the center, and 10% to the localities, then we can say that there is centralization. If, on the contrary, 90% of powers are local, and only 10% are given to the center, then here we can talk about decentralization.
In the first model, the model of excessive centralization, local issues are not resolved, which means that in order to achieve their solution, one must appeal to the center, and this always involves overcoming many bureaucratic steps. In the second option, when 90% of the powers are local, the threat of separatism arises.
It would seem that we need to find the optimum, and such an optimum, obviously, will be a 50 to 50 ratio. But, in fact, we can apply our own optimum ratio of the distribution of powers between the center and the localities to different civilizational contexts, to different country contexts.
For Russia, the issue of centralization is more than relevant. If we look at the course of Russian history, remember how Russian statehood was formed, remember the basic milestones from which Great Russian statehood began to emerge, then we will see that here there was a centralization of Russian lands around Moscow and then - the creation of a Russian centralized state. Through centralization, the vector of Russian history and the building of Russian statehood was set.
In Russian history, this increased importance of the centralization factor was influenced by several integral factors. The first factor is the world's largest territory with an always low population density. Economic ties with such a dispersed population are fragile; a powerful political state center was required that would integrate this space, not always economically, but often politically, and in some other way.
The second factor is the traditional multi-ethnicity on the territory of Russia. This multi-ethnicity implied threats of national separatism, and in order to suppress this national separatism there had to be a powerful center that would not only suppress, but also ideologically integrate this entire space.
Well, the third, perhaps the main factor, in any case, many Russian historians believed so, is the military factor. It is clear that preparations for war and the military sphere cannot be left to the local level. Or rather, it is theoretically possible, but nothing good can come of it.
The military factor of Russia being surrounded by a foreign civilization and the threat of military pressure from the outside implied increased centralization, which has always been preserved in the history of Russia. In the history of Russia there was experience of decentralization, for example, in 1917, during the late Gorbachev period. These points of crisis of statehood - 1917 and 1991 - show how dangerous this decentralization vector, despite its external attractiveness - “let's give power to the localities, let the people solve their problems themselves,” is. Medvedev, as president, actively advocated one of his basic programs - the idea of decentralization.
But there is another challenge. There is a challenge to the omnipotence and arbitrariness of central officials who can paralyze any system, and this challenge must also be taken into account. Therefore, the question here is to find this optimum.
I would like to note that decentralization is not identical to democracy, although sometimes these concepts are almost equated. There are examples of completely different models that emerged as a result of decentralization. Suffice it to recall a classic example that has even become a household name, the Roman Empire.
In essence, it was a decentralized education. The power of the emperor is nominal, the power of the center is insignificant, but in the localities there was by no means democracy. In the localities, the omnipotence of feudal lords reigned, who gained complete control over the population.
The realities of our decentralization - in the 90s, one could observe how criminals and local authorities, being elected figures in local government bodies, essentially seized power locally. But we all know how these elections were carried out. Who could besiege these local authorities and local criminals? Again, only a strong central government.
The first approach is related to finding the optimum between centralization and decentralization. But there is a second approach. You can consider this problem on another scale of the level of controllability - how controllable the system is: 100% or 0%, when it becomes uncontrollable. It is clear that there is not a single system, either absolutely controllable or absolutely uncontrollable, so here we need to find some value that reflects this moment.
The more controllable the system is, the better it is, obviously, the more opportunities there are to solve problems that arise in this system in a targeted manner. If central authorities provide, say, 40% of the level of possible 100% controllability of the system, then in the absence of local authorities this will amount to 40% of the controllability of the entire system.
If local authorities appear, suppose they provide another 40%, that is, the level of controllability of the system in this case is 80% of the theoretically possible level of controllability of the system. In this formulation of the issue, local authorities do not take away their powers from the central ones; they extend their powers to places where the power of the central apparatus does not reach. What is observed here is not a distribution of control from the state level to the local level, but, on the contrary, the accumulation of the effect of both - the local one is added to the state level.
We can give an example of the creation of a centralized state from history. This is the time of Ivan the Terrible. I think that no one will doubt that under Ivan the Terrible the centralization vector was quite strong, but it was under him that local bodies and local government were created.
That is, in this case, it was not a question of redistributing powers to whom more - the center or the localities, but about establishing powers where there was no control at all, that is, a compounding effect is observed. Therefore, in this second proposed formulation of the question, decentralization does not occur as a transition from centralization to local control, a shift of the vector in this direction, but here centralization plus local control is observed as a synergistic effect of spreading the controllability of the system. Thank you.
Stepan Sulakshin: Thank you, Vardan Ernestovich. Vladimir Nikolaevich Leksin.
Vladimir Leksin: The meaning of the concepts “centralization” and “decentralization” would seem obvious and quite simple. Both of these concepts come from the same Latin word - centrum, the center of a circle. It is usually assumed that centralization is the concentration in one hand, in one body, sometimes in one place, of anything - power, resources, political influence.
Decentralization, on the contrary, is the abolition or weakening of the sole function of the center with the appearance of these functions in other government bodies, other territories, and so on. Moreover, centralization and decentralization are the natural foundations or principles for constructing any organizational system. There is probably no organizational structure in which there is only centralization, or in which everything is decentralized.
And here the most important thing, the most difficult thing is to find a balance between them, and neither centralization nor decentralization in its pure form can ever be considered an end in itself, they are always needed for something. And this “for something” is probably the most difficult thing in the science of management, if such a science exists, and even more so in practice.
Why do we concentrate power in one hand, for what purpose are we trying to disperse it in one way or another? There are 4 directions of decentralization of power. The very first direction, the most famous, is the separation of powers. Once upon a time there was a kind of decentralization of the autocratic management structure, when the court and the executive power were in the same hands, and the ruler himself issued laws, and so on.
The second direction, the most understandable to everyone, is the delimitation of jurisdiction, powers and resources between the authorities of individual levels of state territorial administration. The third direction is, unfortunately, the transfer of a number of functions of government bodies to God knows to whom. Most often, non-governmental organizations or commercial structures receive some kind of management outsourcing.
Finally, the fourth, most significant direction is the distribution of state functions between specialized government bodies. The last administrative reform, when we simultaneously had ministries, services and departments, was probably the most surprising phenomenon in the decentralization of power, which, frankly speaking, did not lead to anything good. All the experts say this.
The advantages of decentralization are undeniable - the potential for distribution of power. This is an opportunity, seeing what can be seen from your window, from your workplace, at the level of a small district or settlement, to do something that the center will never be able to do for the reason that there is not enough intelligence, or resources, or information .
At the same time, decentralization is the most difficult of all management actions that can be. And the difficulty here is that the center still remains, and a very complex procedure of agreement, dissatisfaction, and various kinds of not entirely legitimate actions begins regarding what someone needs to do. It's very difficult.
The peak of government decentralization is the federal structure, so it is not surprising that out of almost 200 states, only 25 are federal states. This is an unusually complex system of government. Here in Russia it was done again.
It would seem that now there are no problems for any centralization; everything can be centralized. The most powerful information flows, any information about resources, problems, troubles, and so on can converge in the center. And the center, in the same way, with one click of a computer can transfer any information, any resources, or anything you like to the localities. In reality, all this, of course, is not true.
What is our country like? These are 85 subjects of the federation, of which 3 cities of federal significance - Moscow, St. Petersburg and Sevastopol, 27.5 thousand local governments, 1087 cities, very diverse, from large to small, almost 150 thousand rural settlements, in a third of which no one lives. This is a complex structure, geographically distributed across different borders in the north, south, east, and west of the country.
It would seem that this is where local self-government and local authorities would need to really turn around. Actually this is not true. I have already said that territorial decentralization presupposes, first of all, the delimitation of objects of vision, powers, and resources. Now in the country there are 4,600 different kinds of powers approved by laws, which are distributed among different authorities.
What is local government? He has, for example, 30 of his own issues of local importance, he seems to have his own resources, and most importantly, according to our Constitution, local self-government is not included in the structure of government. This is a completely independent structure.
In fact, this constitutional rule was not only violated from the very beginning, but was never applied, because in local governments 96% of all their powers and 92% of all resources are determined only by the center. This is what they must do according to federal laws, according to the laws of the constituent entities of the Russian Federation, and what they must do on instructions from the president, the Government of the Russian Federation.
They have nothing of their own. They are only executors of what is given from above. And if, God forbid, one of them does something necessary on the spot, but is not included in the rules established by him from above, the laws of resource distribution, and so on, he will immediately go to trial, because this will be considered misuse means or misuse of power.
This chimerical nature of our decentralized system is, of course, extremely harmful; it can only be justified in one way. Centralization in any state is justified and necessary when there is a clear goal towards which the state must go in order for the well-being of the country and the happiness of its citizens to be at an unusually high level.
In this case, perhaps, for some time it is necessary to concentrate power in one hand, so that everyone works only within the framework of this goal. But now, since this does not exist, the balance between decentralization and centralization in our country is not just precarious, it is absolutely irrational.
There has not been a single case when any authority was transferred from top to bottom for its execution, and at the same time a calculation of social, economic, demographic effectiveness was made in terms of the fact that this would have a positive result. This, again, is a centralized shaft of orders and obligations that comes from top to bottom.
As for Ukraine, I cannot say anything about this, because the speeches about decentralization that come from there make me very confused. It seems to me that this is not what these territories would need, which now, from my point of view, absolutely rightly disagree with the actions of the central authorities. Thank you.
Stepan Sulakshin: Thank you, Vladimir Nikolaevich. When we talk about decentralization and centralization, in terms of what do we consider them? What comes to mind in connection with these basic terms? Two categories - state and management, again, public management, because management can be outside state institutions, for example, in some team, corporation, and so on. We still focus on the political vocabulary within the framework of derivative meanings and terms in relation to the state.
That is, we are talking about the institutional state structure, the functional structure and the adjacent numerous aspects of the corresponding relations of state building and public administration.
Formally, and in essence, decentralization is the redistribution of power and resources from higher levels and authorities to lower ones, usually located in a geographic province relative to the capital of the state.
Here two mental spaces are mixed, in which thought seeks a center - the center of a certain space. On the one hand, these are indeed geographical principles, because the state is located in geographical space. There is a capital, where control and decision-making centers, resource distribution sources and origins are concentrated, and a geographical province.
But there is also a second space, already abstract, this is the space of authority or, as they say now, the vertical of power. It is usually presented in the form of a pyramid. The top of the pyramid, the center, at the top, where the capital is, where the central governing bodies are, and below is the entire distributed subordinate space of authorities, levels and powers, and so on. Therefore, here we are talking about centralization and decentralization both in a hierarchical sense - from top to bottom along the levels of subordination, and in a geographical sense. In our federal country this is especially specific.
Why am I talking about two things - about powers and resources? Because subordination in the hierarchy is based on two matters, two institutions. The first subordination is administrative or formalized subordination, the second is based on the possibilities of resource provision for the relevant functions by the relevant bodies.
When redistribution and reform of power relations are now taking place within the framework of federalism or, one step lower, within the framework of local self-government, it is easy to transfer powers. Well, we copied two pieces of paper. Previously, the center was responsible for a certain issue, and now the head of some village council will be responsible, but there are no resources to ensure these powers. Well, how to implement them? Therefore, the power opportunity arises from the administrative and resource opportunities, which in the same way can be centralized or decentralized.
What are powers? This is a set of rights and responsibilities of a government administrative body or person. What type are these rights and responsibilities, these powers? The first, most important type, is political rights and obligations, the second is administrative, the third is legal, the fourth is security or law enforcement.
This applies to financial areas, areas of budgeting, taxation, other elements of the budget revenue base and the possibility of spending them, economic areas, areas of education, culture, health care, science, public safety, ecology, national relations and so on.
It is clear that power without resources in each of these areas turns, to put it mildly, into a fiction. Someone gives coiands to someone, but it is impossible to fulfill this, because there are no material, human and other resources. Resources include, first of all, financial or budgetary components, if we talk about power, which is provided by the tax base and other circumstances, these are state reserves, the contingent of law enforcement agencies in the territory, this is a purely physical factor of administrative power capabilities, information resources and some less significant resources.
Therefore, when we talk about decentralization as a redistribution of power and resources, this is not just a figure of speech. This is a conversation about the very redistribution of the tax base, spending opportunities, areas of responsibility, resources of all types that I talked about.
And, of course, the main issue in such a complex structure of distribution of resources and power mandate is the coordination of powers and resources across levels, so that there are no holes, and so that there is no inconsistency - powers were given, but resources were not given. The opposite is unlikely to happen, because, of course, everyone grabs resources for themselves, and this is understandable.
The second problem is the optimal distribution across levels, both in the center and on the periphery, for example, in the tax revenue base of the budget. Taxes, as they say, are collected on the ground. Here is a person with income, here is an enterprise, here is property subject to tax, and so on. So, how much to collect in taxes and how much to leave at the local, territorial level, and how much to consolidate to the center, and then how much to subsidize back from there within the framework of vertical inter-budgetary relationships - this is a question of a complex multi-parameter optimization problem.
What is the criterion for success in this optimization? This, of course, is the integrity, strength, and success of the state as a whole. Because if you re-centralize, then the state itself will disappear, and if you re-centralize, then it can turn into some kind of structure that is not very reflexive to the realities of life and does not react to what is happening there, as, for example, was the case in the Soviet Union when there was re-centralization and power and resources.
Therefore, re-centralization and re-decentralization are points of a successful appearance and life of the state that cannot be achieved. Success is somewhere in the middle. And finding this optimum, setting up all these material and virtual power redistributions, this is the challenge, in response to which this or that state either becomes successful or may ultimately fall apart.
Can you imagine how relevant this is for our modern Russian state building, in which these issues are resolved in a far from optimal way. Therefore, once again, decentralization is the redistribution of power and resources from higher levels of government and authorities to lower ones, usually located in a geographic province relative to the capital.
Thank you. I hope everyone will now pay attention to what politicians say and what they do when they talk about decentralization. All the best.
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