Crypto Glossary

Posted on September 13, 2021 in
Glossary

Centralized

Centralized system depends on a central point of authority to make decisions and maintain the operation of the entire system.

What is Centralized?

Centralized system is the opposite of a decentralized system where decisions are distributed in ways without the coordination of a central authority. Centralized and decentralized systems are the two types of organizational structure. Each type has its own advantages and disadvantages.

Advantages of centralization

  • Centralized organizations benefit from a clear chain of command and focus on a vision which tends to be quick and efficient execution of decisions.
  • Centralized organizations are also more cost-effective owing to the clear separation of responsibilities between different actors.

Disadvantages of centralization

  • Centralized organizational systems lack control over the implementation process.
  • Employees rely on the information communicated from the top level and there will be delays in work.

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