What Is Centralised?

The concept of centralisation is used to define the level of concentration of power and control over an organisation or network. In a heavily centralised system, an individual or a small group of people has the power to make decisions and enforce them. This method of management is often found in governments, corporations, and the military.

A centralised organisation often has the characteristics of a clearly defined chain of command, uniformity in action, and simplicity in implementing certain changes. These often benefit organisations that prioritise efficiency and cost-effectiveness.

However, centralised structures have downsides that stem from their central point of authority. For example, in comparison with a decentralised autonomous organisation (DAO), centralised systems are at a higher risk of single-point failures, limited in terms of scalability, and lacking transparency.

Key Takeaway

A centralised system is the concentration of power and authority under a single entity or small group.

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