Centralization and decentralization refer to the location of decision making authority in an organization. Centralization means that the authority for most decision is concentrated at the top of the managerial hierarchy whereas decentralization requires such authority to be dispersed by extension and delegation through all levels of management. Actually, these terms denote different degree delegation of authority. Centralization and decentralization are opposite but relative terms because every organization contains both the features. There cannot be absolute centralization and absolute decentralization in practice. In case of having absolute centralization, each and every decision is to be taken by top level management. But practically, it is not possible, some decentralization exist in all organizations. In case of having absolute decentralization, there is no control over the activities of the subordinates which is also not practicable. Therefore, effective decentralization of authority requires a proper balance dispersal of authority among lower levels and adequate control over them.