Centralization as a design consideration for the management of call centers Marco Adria a,* , Shamsud D. Chowdhury b a Faculty of Extension, 210-C University Extension Centre, University of Alberta, Edmonton, Alta., Canada T6G 2T4 b School of Business Administration, Dalhousie University, 6152 Coburg Road, Halifax, NS, Canada B3H 3J5 Received 18 July 2002; received in revised form 13 January 2003; accepted 13 June 2003 Abstract A call center and its associated information technology (IT) provide an opportunity to redesign and improve service-delivery operations. Managers at all levels should understand the role of organizational design as call centers are established or expanded, in particular the relative centralization (distribution of authority) associated with delivering services to customers. This article argues that centralization moderates and influences the organization’s efforts to improve customer service through the implementation of the call center and its IT. If managers fail to capitalize on the particular way that centralization moderates between ITand competitive strategy, the organization may not enjoy an important benefit of the call center, which is competitive advantage through increased efficiency and improved customer service. Based on survey responses from 68 call-center managers, the authors found that both centralization and decentralization are associated with call-center service operations. While the call center provides managers with the ability to influence decision-making (centralization), there are also opportunities for agents in the call center to exercise authority in managing the organization’s communications with customers (decentralization). Implications for organizational practice are considered. # 2003 Elsevier B.V. All rights reserved. Keywords: Call centers; Centralization; Decentralization; Organizational design; Customer service 1. Introduction Productivity gains, much of them driven by infor- mation technology (IT), have become what Smothers refers to as one of the ‘‘creative’’ forces of global competitiveness [27]. Although the relationship between IT and productivity is not entirely clear [9,16,19], better productivity through the appropriate implementation of IT can result in more competitive cost structures and the ability to offer more compe- titive prices, products, and services. An organization’s immediate ability to pursue the strategy of low cost or differentiation depends on its capacity to increase both the efficiency of its operations and its responsiveness to customers. For an example of how IT-driven pro- ductivity can contribute to an organization’s com- petitive position, consider knowledge-leveraging. Knowledge-leveraging is facilitated by IT and invol- ves sharing and integrating cross-functional expertise [30]. Knowledge-leveraging can take place at any level of the organization and can lead to efficiency. Efficiency can lead, in turn, to cost effectiveness. Information & Management 41 (2004) 497–507 * Corresponding author. Tel.: þ1-780-492-2254; fax: þ1-780-492-0627. E-mail addresses: marco.adria@ualberta.ca (M. Adria), shamsud.chowdhury@dal.ca (S.D. Chowdhury). 0378-7206/$ – see front matter # 2003 Elsevier B.V. All rights reserved. doi:10.1016/S0378-7206(03)00087-9