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Industrial & Organisational : Introduction : Personnel : Organizational psychology : Occupations: Work environment: Index : Outline

Decentralisation (American English and Oxford English: decentralization) is any of various means of more widely distributing decision-making to bring it closer to the point of service or action. It occurs in a great many contexts in engineering, management science, political science, political economy, sociology and economics — each of which could be said to study mass decision-making by groups, too large to consult with each other very directly.

Law and science can also be said to be highly decentralised human practices. There are serious studies of how causality and correlations of phenomenon can respectively be determined and agreed across an entire nation, or indeed across the entire human species spread across the planet. While such institutions as the International Criminal Court or Intergovernmental Panel on Climate Change seem highly centralized, in fact they rely so heavily on the underlying legal and scientific processes that they can be said to simply reflect, as opposed to impose, global opinion.

A central theme in all kinds of decentralisation is the difference between a hierarchy, based on:

  • authority: two players in an unequal-power relationship; and
  • an interface: a lateral relationship between two players of roughly equal power.

The more decentralized a system is, the more it relies on lateral relationships, and the less it can rely on command or force. In most branches of engineering and economics, decentralisation is narrowly defined as the study of markets and interfaces between parts of a system. This is most highly developed as general systems theory and neoclassical political economy.

Karl Marx, in Das Kapital, observed that the historical progress of economies from feudalism to capitalism was a classic example of decentralisation. It relied correspondingly less on the authority of a "nobility", and more on flexible systems of control of capital — the markets themselves, which were relatively merciless in driving down the price of labour as one of many factors of production, or punishing poor investment strategyEnglish nobility could be impoverished by a single bad investment decision, which could not have happened under any feudal system.

Many, if not most, political theorists believe there are limits to decentralization as a strategy. They assert that any relaxation of direct control or authority introduces the possibility of dissent or division at critical moments, especially if what is being decentralised is decision-making among human beings. Friedrich Engels famously responded to Bakunin, refuting the argument of total decentralisation, or anarchism, by scoffing "how these people propose to run a factory, operate a railway or steer a ship without having in the last resort one deciding will, without single management, they of course do not tell us".

However, some anarchists have, in turn, responded to his argument, by explaining that they do support a (very limited) amount of centralization, in the form of freely elected and recallable delegates. More to the point from the majority of anarchist perspectives are the real-world successes of anarchist communities, which for the majority only ended when they were defeated by the overwhelming military might of the State or neighbouring States. All in all, we do not know what a truly decentralized society would look like over a long period of time since it has never been permitted to exist, however the Zapatistas of Mexico are proving to be quite resilient, having thus far maintained their autonomy since 1994, and continue to improve and develop their communities.

In "On Authority", Engels also wrote of democratic workplaces that "particular questions arise in each room and at every moment concerning the mode of production, distribution of material, etc., which must be settled by decision of a delegate placed at the head of each branch of labour or, if possible, by a majority vote."

Modern trade unions and management scientists tend to side strongly with Engels in this debate, and generally agree that decentralization is very closely related to standardisation and subordination, e.g. the standard commodity contracts traded on the commodity markets, in which disputes are resolved all according to a jurisdiction and common regulatory system, within the frame of a larger democratic electoral system which can restore any imbalances of power, and which generally retains the support of the population for its authority.

Notable exceptions among trade unions are the Wobblies, and the strong anarcho-syndicalist movement of Spain. However, a strategy of decentralization is not always so obviously political, even if it relies implicitly on authority delegated via a political system. For example, engineering standards are a means by which decentralisation of supply inspection and testing can be achieved — a manufacturer adhering to the standard can participate in decentralised systems of bidding, e.g. in a parts market. A building standard, for instance, permits the building trades to train labour and building supply corporations to provide parts, which enables rapid construction of buildings at remote sites. Decentralization of training and inspection, through the standards themselves, and related schedules of standardized testing and random spot inspection, achieves a very high statistical reliability of service, i.e. automobiles which rarely stall, cars which rarely leak, and the like.

In most cases, an effective decentralisation strategy and correspondingly robust systems of professional education, vocational education, and trade certification are critical to creating a modern industrial base. Such robust systems, and commodity markets to accompany them, are a necessary but not sufficient feature of any developed nation. A major goal of the industrial strategy of any developing nation is to safely decentralise decision-making so that central controls are unnecessary to achieving standards and safety. It seems that a very high degree of social capital is required to achieve trust in such standards and systems, and that ethical codes play some significant roles in building up trust in the professions and in the trades.

The consumer product markets, industrial product markets, and service markets that emerge in a mature industrial economy, however, still ultimately rely, like the simpler commodity markets, on complex systems of standardization, regulation, jurisdiction, transport, materials and energy supply. The specification and comparison of these is a major focus of the study of political economy. Political or other decision-making units typically must be large and leveraged enough for economy of scale, but also small enough that centralised authority does not become unaccountable to those performing trades or transactions at its perimeter. Large states, as Benjamin Franklin observed, were prone to becoming tyrannies, while small states, correspondingly, tended to become corrupt.

Finding the appropriate size of political states or other decision-making units, determining their optimal relationship to social capital and to infrastructural capital, is a major focus of political science. In management science there are studies of the ideal size of corporations, and some in anthropology and sociology study the ideal size of villages. Dennis Fox, a retired professor of legal studies and psychology, proposed an ideal village size of approximately 150 people in his 1985 paper about the relationship of anarchism to the tragedy of the commons.

All these fields recognize some factors that encourage centralised authority and other factors that encourage decentralised "democracy" — balances between which are the major focus of group dynamics. However, decentralisation is not only a feature of human society. It is also a feature of ecology.

Another objection or limit to political decentralisation, similar in structure to that of Engels, is that terrestrial ecoregions impose a certain fiat by their natural water-circulation, soil, and plant and animal biodiversity which constitutes a form of (what the United Nations calls) "natural capital". Since these natural living systems can be neither changed nor replaced by man, some argue that an ecoregional democracy which follows their borders strictly is the only form of decentralisation of larger political units that will not lead to endless conflict, e.g. gerrymandering, in struggle between social groups.

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