Performance management: Responsibility centres Flashcards
What is decentralization ?
The more decisions that a divisional manager is free to make, the more decentralized the company is.
What are the eight factors affecting degrees of decentralization ?
Management style.
Size of Org.
Extent of diversification.
Communication.
Management’s ability.
Technology.
Geographical location.
Extent of local knowledge.
What are the advantages of decentralization ?
SMART - We want smart organizations!
Strategic issues of senior managers.
Motivation of local managers.
Autonomy leads to better decision making.
Rapid decisions.
Training.
What are the disadvantages of decentralization ?
CLOUD - Decentralization creates a cloud over clarity ad control.
Co-ordination.
Lack of GC.
Oversight (loss of control) at senior level.
Unclear evaluation of managers.
Duplication of costs.
What is a responsibility center ?
Individual part of a business who’s manager has personal responsibility for its performance.
Talk me through the table of responsibility centers, what they have control over and potential performance measures.
What is a SSC ?
A central team in a company that handles common tasks for the whole business — like finance, HR, IT, or payroll.
What is the aim of a SSC ?
Reduce costs while improving service levels.
[A fair TP policy is important to ensure success]
What are the advantages of a SSC ?
SLEK
Reduced headcount.
Reduced floorspace.
Knowledge sharing.
Standardization.
What are the disadvantages of a SSC ?
CLIP - Aspects may be ‘clipped away’ when using SSC.
Cost inefficiencies.
Loss of business-specific knowledge.
Isolation ~ misinformed decisions.
Poor relationships.
Give me the advantages of cloud accounting ?
Flexible.
Cost efficient.
Security.
Automatic updates.
Give me the disadvantages of cloud accounting ?
Internet access.
Supplier reliance.
Security/ privacy breaches.
