"In the context of organisations, centralisation is where the upper management run majority of the operations of the organisation whilst decentralisation is where the lower levels of management run majority of the operations. Limited liability companies are similar to decentralised organisations where the shareholders don't really do much of the operations whilst the managers do. What arises from a decentralisiaed organisation is the conflict between the agent individual and the principal individual which has been described in the 'principal-agent theory'."
