In business organization theory is understood to be a central point centralization under the summary of the same or similar tasks, work areas or areas of responsibility. This center can be interpreted as a center. Accordingly, can be distinguished:
- The Verrichtungszentralisation that summarizes operational tasks, which like chores are based, such as procurement tasks.
- The Phasenzentralisation in which tasks are coupled serving the planning, execution and control, eg in the financing.
- The Entscheidungszentralisation as a summary of operational decisions at a central point.
- The Verwaltungszentralisation be coupled with the dispositive certain tasks, such as functions of HR management.
The centralization aims to increase the efficiency of the processes involved and to reduce redundancies. This goal may be approached by both spatial and by objective centralization. The efficiency effect of centralizing measures can be reduced by longer decision-making and additional decision-making levels. Strategic realignments are easier to perform; mid-level management must exercise less options micropolitical behavior.
The opposite approach is the decentralization, ie to distribute various tasks on many positions or locations. Depending on the type of business venture can be a tendency to centralization or decentralization to more. A decentralized organization allows greater design freedom, flexibility and proximity to the market. This form can also be ethically friendly, since responsibility is less shifted to supervisors, central remote or fixed bureaucratic structures. Innovative industries can benefit from it.
The centralization of capital is an important tendency of capitalist economies to Karl Marx. He means that the number of firms decreases by large companies the little swallow, or by coming to corporate mergers. In today's language, the Kapitalzentralisation approximately equal to the relative concentration. The centralization of capital is closely linked to the law of the tendential fall in the profit rate.