Centralization in management refers to:

Centralization in management is a concept where decision-making authority is concentrated at the top levels of management within an organization. This means that higher management retains control over critical decisions, policies, and procedures, while lower levels may have limited power to influence strategic direction. By consolidating decision-making at higher management levels, organizations can maintain a uniform direction and ensure that decisions align with overarching goals and strategies.

This approach can lead to streamlined processes and quick decision-making in certain situations since fewer people are involved in the decision-making process. However, it can also result in a lack of input from employees at lower levels, which might stifle innovation and responsiveness. Understanding this concept is crucial because it highlights how an organization’s structure and decision-making processes can significantly impact its effectiveness and agility in adapting to market changes.

The other options reflect different management approaches. Distributing decision-making throughout the organization represents decentralization, which can empower lower management levels and encourage innovation. Limiting decision-making to lower management levels also aligns more with decentralization and may not accurately portray the nature of centralization. Encouraging teamwork and collaboration can occur in both centralized and decentralized structures, but it doesn't specifically address the concentration of decision-making authority, which is the essence of centralization.