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BUSI 1003 (12)
Chapter 14

Chapter 14

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Carleton University
BUSI 1003
Patti Proulx

Chapter 14 - Performance Evaluations for Decentralized Operations ● Centralized business – all major planning and operating decisions are made by top management. ● Decentralized business – separating a business into divisions and delegating responsibility to unit managers. ○ Divisions are structured around common functions, products, customers, or regions ○ Benefits of Decentralization: ■ Lower level managers gain experience in decision making ■ Lower level decision often based on better information ■ Top management freed to concentrate on strategy ■ Decision making authority leads to job satisfaction ■ Lower level manager can respond quickly to customers ○ Disadvantages of Decentralization: ■ May be lack of coordination among autonomous managers ■ Lower level managers may make decisions without seeing the ‘big picture’ ■ Lower level manager’s objectives may not be those of the organization ■ May be difficult to spread innovative ideas in the organization ○ Responsibility accounting is the process of measuring/reporting operating data by responsibil
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