Centralised

Treasury organisation which retains control at the centre, contrasted with a decentralised approach.

As companies became larger, authority in treasury matters tends to become more centralised in the interests of financial efficiency and control.

However, greater centralisation, if badly handled, can result in local demotivation and poor alignment of treasury policy with local business needs. In particular, local cash management is sometimes considered to be better managed at subsidiary level.

In the largest organisations, 'dynamic balance' often applies. This involves the sharing of responsibility between the centre and subsidiaries. Authority moves between centre and subsidiaries on the basis of a continuing dialogue about which party is best suited to make particular decisions.

See also

• Decentralised
• In-house bank
• Profit centre
• Regional Treasury Centre
• Treasury organisation