Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Decentralization, Centralization and Quality of Organizational Performance of Human Resources

Author(s): Fory A. N Away, Benget Simamora, Salam Irianto Nadeak, Mulyawan Safwandy Nugraha, Indra Prasetia, Prasetyono Hendriarto

The success of an organization in achieving set goals is largely dependent on performance. A decentralized organization provides freedom of authority for lower managers to make decisions. This study, therefore, aims to analyse the effects of decentralization, centralization, and the quality of human resources on organizational performance. Data were randomly obtained from 105 people using the survey and quantitative approach. The study showed that the partial effect of decentralization (X1) has no significance so it isn’t accepted, Variable centralization (X2), and human resources (X3) on the organizational performance (Y) of the Rural Banks were positively and significantly accepted. Therefore, these three variables have an effect on improving organizational performance, thereby, delegating decision-making power to experts in need of knowledge on a particular issue, technology, product, or market. High centralization rates mean greater coordination and smaller flexibility, while decentralization is attributed to greater flexibility and less coordination.

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