What is the purpose of Centralisation?

Following are some of the purposes of Centralisation:

1. To facilitate personal leadership. In the early stages of an enterprise and in small firms, the success depends largely on the personal leadership of a dynamic and talented leader. Authority may be centralised to give full scope to facilitate personal leadership which may result in quick decisions and imaginative action.
2. To provide integration. Co-ordination of individual efforts is essential to the success of every organisation. Centralised direction is an effective means of unification and integration of individual efforts. It acts as a binding force on the various units of the organisation.
3. To achieve uniformity of action. Where uniformity of policy and action is required, authority may be centralised at the top. Such uniformity is often desirable in personnel, purchasing and advertising. Therefore, authority in these tends to be centralised.
4. To improve efficiency. Centralisation helps to avoid overlapping efforts and duplication of work. It enables the management to exercise effective control in order to minimise waste and to achieve economy in operations.