---
title: "Short note: Centralization and decentralization"
subject: "Construction Management"
chapter: 10
key: "semester_8/construction_management:centralization-decentralization-note"
source: https://www.bctengineer.com/q/semester_8/construction_management/centralization-decentralization-note
site: BCT Engineering
---

# Short note: Centralization and decentralization

Construction Management · Chapter 10: Personnel Management

- Asked in: 2067 Mangsir (old course), 4 marks; 2066 Magh (old course), 4 marks; 2064 Poush (old course) (asked 3 times)
- Video: [Centralisation and Decentralisation](https://www.youtube.com/watch?v=M1sV6YhxQD8) — tutor2u
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/construction_management/centralization-decentralization-note
- Whole chapter: https://www.bctengineer.com/md/semester_8/construction_management/chapter-10

## Question

Write a short note on centralization and decentralization.

## Short answer

Centralization concentrates decision-making at the top for uniform policy and control. Decentralization delegates authority to lower levels for quick, on-the-spot decisions and initiative. Construction firms often balance both: policy at headquarters, daily site matters delegated.

## Answer

#### Centralisation
**Centralisation** is the concentration of decision-making authority at the top of the organisation. Top management takes the main decisions; lower levels only carry them out.

#### Decentralisation
**Decentralisation** is the systematic delegation of authority and decision making to lower levels (branch, project or site managers), who can decide within the policy.

| Point | Centralisation | Decentralisation |
|---|---|---|
| Decision making | At the top | Spread to lower levels |
| Speed | Slow for far sites | Quick, on the spot |
| Uniformity of policy | High | Lower |
| Control | Easy | Needs a good control system |
| Initiative of managers | Low | High |
| Top management load | Heavy | Light |
| Suitable for | Small firm, crisis, uniform operations | Large, scattered projects |

#### In construction
A contractor with several projects usually delegates site matters (labour, daily purchase, work order) to the project manager (decentralised) but keeps the policy decisions such as tendering, big purchases and finance at head office (centralised). The best organisations use a suitable balance of both.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. What is centralisation?
   A. Delegation to site managers
   B. Concentration of decision-making authority at the top
   C. Equal authority for all
   D. Absence of control
   Answer: B. Top management takes main decisions; lower levels carry them out. (Key point: Centralisation)

2. What is an advantage of decentralisation for scattered sites?
   A. Quick on-the-spot decisions
   B. Uniform policy always
   C. Light control
   D. No delegation
   Answer: A. Site managers decide quickly on the spot; it also raises manager initiative. (Key point: Decentralisation advantage)

3. In a contractor's firm which decisions stay centralised?
   A. Daily purchase
   B. Labour matters
   C. Policy matters such as tendering, big purchases and finance
   D. Work orders
   Answer: C. Site matters are delegated; tendering, large purchases and finance stay at head office. (Key point: Construction practice)