Centralization Essay

Centralization is said to be a process where the concentration of decision making is in a few hands. All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management. According to Allen, “Centralization” is the systematic and consistent reservation of authority at central points in the organization. The implication of centralization can be :- 1. Reservation of decision making power at top level. 2. Reservation of operating authority with the middle level managers. . Reservation of operation at lower level at the directions of the top level. Under centralization, the important and key decisions are taken by the top management and the other levels are into implementations as per the directions of top level. For example, in a business concern, the father & son being the owners decide about the important matters and all the rest of functions like product, finance, marketing, personnel, are carried out by the department heads and they have to act as per instruction and orders of the two people.

Therefore in this case, decision making power remain in the hands of father & son. Centralization came with the invasion of the country by the Spaniards, the Americans, and the Japanese. A strong central government was needed to control numerous attempts to regain freedom. When independence was finally restored in 1946, reconstruction was directed by a strong government. But the innate desire for autonomy asserted itself through the years. A Local Autonomy Act was passed in 1959 (Republic Act 2264) to grant fiscal and regulatory powers to local governments.

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In 1967, a Decentralization Act (RA 5185) was enacted to increase the financial resources and powers of local governments. The 1973 Constitution of the Republic mandated that the state “shall guarantee and promote the autonomy of local governments to ensure their fullest development as self-reliant communities”. These initiatives were stymied by the martial rule of the country for twenty years. Its end was brought about by the expressed action of the Filipinos against authoritarianism.

Thus, the strengthening of democracy through people empowerment was on top of the agenda of the Aquino and Ramos governments. A Local Government Code was enacted in 1991 that institutionalized a systematic allocation of powers and responsibilities between the national and local governments. It would be fair to say that the political motive was a strong factor that influenced devolution. Decentralization was perceived to be an effective means of diffusing power from the center that would effectively prevent an authoritarian regime, such as the Marcos regime, from re-emerging in the future.

In some organizations, top managers make all the decisions and lower-level managers and employees simply carry out their orders. At the other extreme are organizations in which decision making is pushed down to the managers who are closest to the action. Centralization describes the degree to which decision making is concentrated at the upper level of the organization. If top managers make the organization’s key decisions with little or no input from below, then the organization is centralized. Factor that Influence the Amount of Centralization ?Environment is stable Lower level managers are not as capable or experienced at making decisions as upper-level managers ?Lower-level managers do not want to have a say in decisions ?Decisions are relatively minor ?Organization is facing a crisis or the risk of company failure ?Company is large ?Effective implementation of company strategies depends on managers retaining says over what happens. In tougher periods when markets were tight and income generation a problem, organizations centralized in order to gain greater control over expenditure, employment policies and so forth. However, the picture is complicated by the growth of organizations.

Growth from the small entrepreneurial business to the large and diversified conglomerate seems to impose patterns of organization design. There seem to be distinct phases in the growth of an organization, each with its own tensions and its own distinctive organizational solution, albeit not necessarily applied in pure form in any particular case. As will be clear already, there are arguments for and against centralization and these depend upon the circumstances. 1. Co-ordination is more straightforward if decisions are made at clearly recognized points w/in the organization structure. 2. Senior management have a broader perspective on developments w’in the organization and maintain conformity with established policies.

They are more likely to keep up to date with recent developments, throughout the industrial service. 3. Centralization of control and procedures provides a way of assisting the various functional areas in the organization- research and development, production, personnel, finance and administration- to maintain an appropriate balance. This occurs by centralizing decisions on resource allocation, functional policies, targets and human resource matters. 4. Centralization can allow rationalization of managerial overheads by avoiding duplication of activities or resources where similar activities are being carried out independently in divisions or sub units. 5. Top managers are seen to have proved themselves by the time they reach a senior position. Although a point in favor of centralization, there is a danger that management can adopt the attitude that purely because they are at the top, they are right. 6. Crisis often require strong leadership to cope with external and internal pressures. Centralization of power and control of procedures focus on a key person or group.

Thus arises the opportunity for speedy decision-making and control over commun ication and co-ordination. Local Government in the Philippines Historical accounts show ancient community governments headed by the Datu who exercised executive, legislative, and judicial powers, often upon consultation with a Council of Elders. Pre-Spanish barangays were well organized. They had the Datu who took charge of government, the panday (blacksmith) who took care of technology, forming the tools used for domestic activities to tools for work. The babaylan took charge of the cultural and scientific aspects of life, e. . , rituals, medicine, astronomy (Salazar 1989). Arcellana (1954) categorically stated that the barangays were not local governments, but rather had the status of city-states. These have been substantiated by the foregoing definitions. Centralization became a weapon of the Spaniards in colonizing the country. At first, they awarded parcels of lands to favored persons who assisted them in the pacification of the islands. Later, they created cabildos (cities), pueblos (municipalities), provincias (provinces) which in ascending hierarchy, assisted the Spaniards in Manila in fully colonizing the country.

The barangays were reduced into barrios and the Datus were demoted into Cabezas de Barangay, whose only function was to assist the higher levels of government in collecting tribute (De Guzman and Tapales 1973). Thus, the sovereign and powerful barangays became the lowest rung in the ascending order of governmental power. While the Philippine Republic organized by Aguinaldo and Mabini gave more attention to the local units, autonomy could not be given the local governments because at that time, it was important to retain the unity of the islands.

Thus, centralism remained (Laurel1924). The Americans who robbed the Filipinos of victory against the Spaniards continued the convenient system of centralization introduced to the country by the Spaniards. Provincias were renamed provinces, cabildos cities, and pueblos municipalities, keeping the hierarchical chain of command from Manila undisturbed. Centralism, therefore, while a foreign imposition, thrived in the Philippines for centuries, and was kept intact by the Philippine government after political independence in 1946.

The Constitution of 1935 mentioned local government in only one section; Art. VII Sec. 10 provided that “the President shall exercise general supervision over local governments as may be provided by law. ” Until 1972, the President and the Congress determined the relationship between the national and local governments by statutes and executive orders, and they were interpreted by the Courts in ways befitting the temper of the times and those of the justices (De Guzman and Tapales 1973).

Martial Law from 1972 strengthened the President’s powers over local government, despite an article in the Constitution of 1973 and the creation of a Department of Local Government and Community Development by virtue of Presidential Decree No. 1. By presidential decree, President Marcos created and abolished offices, rapidly changing the relationship between the local and national governments. After people power in 1986, the national government became more responsive to the lower units of government. The 1987 Constitution provided for special forms of local government in response to ethnic peculiarities in Muslim Mindanao and Cordilleras.

Moreover, Congress passed the Local Government Code of 1991 which has far-reaching effects in national-local relations because it provided for devolution of powers and services. Although the Local Government Code of 1991 provides for devolution of powers, the Philippines remains a unitary state. As such, local governments are creatures of the national government. The national government by law creates, merges, or abolishes local government units, endows them with powers within their jurisdictions, and determines national-local government relations.