ACCT 2102 Chapter Notes - Chapter 10: Fixed Cost, Income Statement, Management Accounting
30 Mar 2018
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Now that we have addressed decision-making and planning, we will begin our discussion of controlling. This phase in the managerial accounting cycle focuses on performance evaluation. Companies that decentralize divide their operations into segments and delegate decision- making the segment managers. Companies are commonly decentralized along product lines, geographic regions, and responsibility centers. This leads to better information and improved decision-making: segment managers are able to quickly respond to customer demands. To maximize goal congruence, top management should create appropriate performance evaluation systems. The performance evaluation system should clearly communication the expectations of top management to segment managers, provide benchmarks against which segment managers can compare operating results, and motivate segment managers to achieve the goals of the company. Keep in mind that what motivates one manager may not motivate another manager. Such incentives as bonuses, additional vacation time, and company recognition should be considered as motivating factors.
