Degree of centralization
Another organizing decision is the degree of centralization in the organizational structure. If decision-making authority in an organization is highly centralized, then most major decisions are made at the upper levels of the structure. Conversely, if decision-making authority is decentralized, important decisions are often made at lower levels of the hierarchy. The degree of centralization that is appropriate for a given organization depends upon many factors, including the nature of the environmental conditions that face the enterprise, the characteristics and abilities of lower-level employees, and the size of the enterprise. Many organizations are favoring a greater degree of decentralization of their decision-making authority.