tailieunhanh - Lecture Managerial accounting - Chapter 12: Segment reporting, decentralization, and the balanced scorecard

Managers in large organizations have to delegate some decisions to those who are at lower levels in the organization. This chapter explains how responsibility accounting systems, segmented income statements, and return on investment (ROI), residual income, and balanced scorecard measures are used to help control decentralized organizations. | Segment Reporting, Decentralization, and the Balanced Scorecard Chapter 12 Chapter 12: Segment Reporting, Decentralization, and the Balanced Scorecard. Managers in large organizations have to delegate some decisions to those who are at lower levels in the organization. This chapter explains how responsibility accounting systems, segmented income statements, and return on investment (ROI), residual income, and balanced scorecard measures are used to help control decentralized organizations. Decentralization in Organizations Benefits of Decentralization Top management freed to concentrate on strategy. Lower-level managers gain experience in decision-making. Decision-making authority leads to job satisfaction. Lower-level decisions often based on better information. Lower level managers can respond quickly to customers. A decentralized organization does not confine decision-making authority to a few top executives; rather, decision-making authority is spread throughout the organization. | Segment Reporting, Decentralization, and the Balanced Scorecard Chapter 12 Chapter 12: Segment Reporting, Decentralization, and the Balanced Scorecard. Managers in large organizations have to delegate some decisions to those who are at lower levels in the organization. This chapter explains how responsibility accounting systems, segmented income statements, and return on investment (ROI), residual income, and balanced scorecard measures are used to help control decentralized organizations. Decentralization in Organizations Benefits of Decentralization Top management freed to concentrate on strategy. Lower-level managers gain experience in decision-making. Decision-making authority leads to job satisfaction. Lower-level decisions often based on better information. Lower level managers can respond quickly to customers. A decentralized organization does not confine decision-making authority to a few top executives; rather, decision-making authority is spread throughout the organization. The advantages of decentralization are as follows: It enables top management to concentrate on strategy, higher-level decision-making, and coordinating activities. It acknowledges that lower-level managers have more detailed information about local conditions that enable them to make better operational decisions. It enables lower-level managers to quickly respond to customers. It provides lower-level managers with the decision-making experience they will need when promoted to higher level positions. It often increases motivation, resulting in increased job satisfaction and retention, as well as improved performance. Decentralization in Organizations Disadvantages of Decentralization Lower-level managers may make decisions without seeing the “big picture.” May be a lack of coordination among autonomous managers. Lower-level manager’s objectives may not be those of the organization. May be difficult to spread innovative ideas in the organization. The disadvantages of decentralization