An organization is said to decentralized it the authority to make decisions is delegated to managers at the lower ladders of the organizational hierarchy. What really constitutes decentralization is relative. In contrast to a centralized organization, top management is either fully centralized or fully decentralized. certain decisions are often centralized and others are decentralized. As a general rule, factors such as the size of the organization, the degree of interaction between members, management of philosophy and the personality of the members determine the degree of decentralization.