Centralization, Organizational Strategy, and Public Service Performance

We test the separate and joint effects of centralization andorganizational strategy on the performance of 53 UK public serviceorganizations. Centralization is measured as both the hierarchyof authority and the degree of participation in decision making,whereas strategy is measured as the extent to which serviceproviders are prospectors, defenders, and reactors. We findthat centralization has no independent effect on service performance,even when controlling for prior performance, service expenditure,and external constraints. However, the impact of centralizationis contingent on the strategic orientation of organizations.Centralized decision making works best in conjunction with defending,and decentralized decision making works best in organizationsthat emphasize prospecting.