Centralisation of authority means concentration of authority for decision-making at top level management. An organisation is said to be centralised, if top management retains authority for making almost all decisions on the functioning of the organisation.
In such an organisation, very little authority is delegated to managers at middle and lower levels. They are required to depend on the top management for instructions and guidance in their day-to-day activities. The top management exercises strict supervision and control over all the functions, whereas, decentralisation is transfer of authority to the lower levels of management hierarchy. It explains the manner, in which decision-making responsibilities are divided among hierarchical levels.