Merits / Advantages of Centralisation:

1.Effective utilisation of talents of the top Leader.

2.All parts move together. A unifying force that integrates all operations.

3.A strong co-ordinated top management team is developed.

4. Uniformity of policy and plans.

5.Best-arrangement to tackle emergencies. Resources and information can be mobilised quickly and effectively.

6. Duplication of functions and facilities are minimised.

Demerits / Disadvantages of Centralisation:

1. Delays in decision-making and Communication.

2. Centralised power and authority may be abused.

3. Inhibits development of lower level people.

4. Low motivation and morale of lower level people.

5. Fortunes of the enterprise depend on the health and vitality of top executives