Chapter 10/11

Question 1

What is decentralization?

Answer 1

• Autonomy
• It divides/splits a company into different segments or departments.

Question 2

What are the advantages and disadvantages of decentralization?

Answer 2

• Top management can spend their time in setting strategies
• Quick decisions
• Customer service would be better
• More specialization leads to productivity
• Incentive to work harder

[[[DISADVANATGES]]]
- Difficult to coordinate
- Opportunity for manipulation

Question 3

What are the different responsibilities centers?

Answer 3

• Cost Center
• Revenue Center
• Profit Center
• Investment Center

Question 4

What are Cost Centers?
-Provide Examples-

Answer 4

The manager is responsible for controlling costs
EX -
+ HR
+ Department of Labor

Question 5

What is a Revenue Center?
-Provide Examples-

Answer 5

The manager is responsible for generating revenue
EX -
+ Regional Sales manager

Question 6

What is a Profit Center?
-Provide Examples-

Answer 6

The manager is responsible for both controlling costs and generating revenue
EX -
+ Product Line
+ Stores

Question 7

What is an Investment Center?

Answer 7

The manager is responsible for overseeing income and investing capital
EX -
+ Company

Question 8

What is a Responsibility Center?

Answer 8

Managing multiple responsibilities. (Investment, Costs, Revenue, Profit)
EX -
+ Any segment of business whose manager is accountable for specific activities.