CENTRALIZATION VERSUS DECENTRALIZATION IN BUSINESS ORGANIZATIONS: CYBERNETIC RULES FOR EFFECTIVE MANAGEMENT

Abstract

Management as an applied science aims at providing principles, guidelines or “slogans” for effective problem-solving in social systems. In most cases these principles reflect successful managerial practice, and they often are far from being operational or theoretically grounded. It will be shown how cybernetics can serve as a theoretical base for developing such managerial rules of action. A methodology for getting access to the cybernetic body of knowledge is outlined in detail and examples of cybernetic laws relevant to managerial practice are given. The basic approach of translating cybernetic insights into managerial rules of action is finally demonstrated for the problem area of centralization versus decentralization in business organizations.