There should be one central point in the organization whichexercises overall direction and control of all the parts. Butthe degree of centralization of authority should varyaccording to the needs of situation. According to Fayolthere should be centralization in small units and proper decentralization in big organization. Further, Fayol doesnot favor centralization or decentralization of authorities but suggests that these should be proper and effectiveadjustment between centralization and decentralization inorder to achieve maximum objectives of the business. Thechoice between centralization and decentralization is madeafter taking into consideration the nature of work and the