[moron4hire]

Centralization is (always?) less efficient per-unit-work than decentralization, because centralization requires a hierarchy of management overhead to work. Centralization makes more efficient things other than the unit-work, things like aggregate tracking. These things are typically only of concern to the organization doing the management and have almost nothing to do with the goals of the party for whom the work is being done.

Take, for example, developing a website. Maybe it's a site for a small municipality to post community updates. This work could be done by a small, local consulting group or a gigantic, multi-national one. All else being equal, the cost of the project will necessarily be higher with the large consultancy than with the small.

And experience bears this out. I've been in both large and small consultancies, and the only difference was how many layers of management were on top of the decision process. There is no "economy of scale" for developing to a customer's needs. And there is nothing in the management overhead of the giganto-corp that improves the project for the customer. All that overhead has to get paid for in some way, so it necessarily leads to higher project costs (which probably means massive budget overruns because the big Corp probably priced the project at or under the local Corp in order to close the deal).

Large, centralized systems become something like hedges for the management org. They lose money on a long tail of small projects only to make it back with more on a few, large winners that can be milked. We look at the bottom line and say "everything is up! It must be good!", but we don't stop to look at the individual failures. While, if it were all decentralized, we wouldn't have a metric to look at to determine what direction the aggregate it going on, but that long tail would probably be served a lot better.