Every manager should know the steps to total quality management (TQM), but it is also a good idea to learn what the difference is between ‘centralized’ and ‘decentralized’ human resources. Knowing about these two types of system can help you when establishing your business or company.
In short, knowing the main objectives in the management of human resources, contemplates knowing basic concepts related to the management of companies and entities. Therefore, knowing the centralized and decentralized systems is very relevant.
centralized systems
In the case of human resources, companies or organizations, a centralized system refers to one in which a central core is in charge of the essential aspects of the organizational structure. In other words, this central entity is usually the one that gives the last word or makes the most relevant decisions of a company or entity.
Centralized systems are characterized by having few representatives or managers and these have absolute/almost absolute power. It could be said that those organizations or companies in which there is a president who has the greatest responsibility for decision-making are centralized entities.
decentralized systems
Decentralized systems, unlike centralized systems, usually have several managers or people with power. This makes the authority usually depend on several individuals or entities. In the decentralized system there are several who can make relevant decisions for the company.
This type of system usually has a considerable number of responsible individuals. In fact, it is very similar to the delegations, where several managers intervene directly in the course of companies or organizations.
The differences between ‘centralized’ and ‘decentralized’ human resources
There are several differences between centralized and decentralized human resources. In any case, in general terms, we can establish two very relevant points:
- In the centralized system there are few managers or bosses, while in the decentralized system power or decision making can be carried out by several individuals.
- In centralized systems, as its name indicates, there is a central entity. In a decentralized human resources system, there are several entities for each task.
Advantages and disadvantages of centralized and decentralized human resources
In a centralized system, specialization is encouraged, which is why a highly trained professional stands out. On the other hand, a decentralized system usually leaves aside the specialized person, since there are several decision-makers.
Related to the previous point, in centralized systems usually the most prepared have better positions, but a very busy job. On the other hand, in decentralized systems, the most qualified people may not have the best position, but ultimately their workload is lower.
In centralized systems it is well known that, due to the fact that decisions are usually made by a few individuals, it can lead to a monopoly of guidelines. On the other hand, in decentralized systems, actions are usually taken by all those in charge and not by a central figure.
Centralized systems take into account the human resources sector as a primary aspect. In any case, a decentralized system often eliminates limits, since even decisions in this area are made by all those in charge, presenting examples of companies with problems in the area of ​​Human Resources.
Finally, in centralized systems, meritocracy is usually the order of the day, but this has the negative aspect that those who are below cannot rise. On the other hand, a decentralized human resources system contemplates that there are more possibilities for improvement for rookies, in any case, it usually lowers the quality of the team that works.
The best option for small businesses
On a business level, certainly what is most recommended for small companies is a centralized system. Even so, it is worth learning a little about decentralized systems, but even more important for your company is knowing the most important factors that influence human resource management, since in the long run it will be the employees who determine the Business success.
