Centralization considers where the locus of decision-making authority lies. In some organizations, decision making is highly centralized. Problems flow upward, and the senior executives choose the appropriate action. In other cases, decision making is decentralized. Authority is dispersed downward in the hierarchy. It is important to recognize that, as with complexity and formalization an organization is not either centralized or decentralized. Centralization and decentralization represent two extremes on a continuum. Organization tend to be centralized or lend to be decentralized. The placement of the organization on this continuum, however, is one of the major factors in determining what type of structure exists