Question : Statement 1: Centralization involves decision-making by a few top-level managers.
Statement 2: It restricts the autonomy of lower-level employees.
Option 1: Statement 1 is true, and Statement 2 is false.
Option 2: Statement 1 is false, and Statement 2 is true.
Option 3: Both Statement 1 and Statement 2 are true.
Option 4: Both Statement 1 and Statement 2 are false.
Correct Answer: Both Statement 1 and Statement 2 are true.
Solution : The correct answer is (c) Both Statement 1 and Statement 2 are true.
Statement 1 is true. Centralization refers to the concentration of decision-making authority at the top levels of an organization, where a few top-level managers or executives make key decisions for the organization.
Statement 2 is true. In a centralized organizational structure, decision-making authority is concentrated at the top, which can limit the autonomy and decision-making power of lower-level employees. Lower-level employees may have less flexibility and freedom to make decisions without approval from higher levels.
Statement 2: It promotes employee empowerment and participation in decision-making.
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