Medium to large organizations can centralize some operations ( or even all of them) or they might be totally decentralized.  Or there could be some balance between the two concepts .

My own preference is a balanced approach focused on the goals (What is the purpose of the structure, what do you want to achieve?) Unfortunately the organizations culture often dictates the preference.

Rather than design the operational approach for effectiveness it defauts to the cultural bias.

For Example

Consider the six main Canadian Financial Institutions.  Their reputation for having risk averse conservative bureaucratic cultures is definitely a stereotype and a bit of a broad brush .

That being said, on the whole most would agree there is some basis of truth to that characterization.  Conservative, risk averse organizations tend to have  strong central governance tied to underlying operations with some autonomy, but limited.

Those familiar with the Canadian F.I.’s operational structure know this is exactly the case for these organizations.

Similarly, post secondary educational institutes generally have cultures espousing academic freedom and individual initiative .  In turn this often equates to decentralized operational structures.

Culture or Goals

Operational processes aligned primarily with the organizations culture can serve a valuable purpose (supporting and reinforcing the culture), however, there may be some disconnects with alignment to the corporate goals.

Operational centralization and decentralization impact cost, service quality and overall efficiency.  One size does not fit all and alignment with organizational goals, versus culture is often more effective although can be harder to implement.