The key to effective decision making in a decentralized organization is responsibility accounting: holding managers responsible for only those things that are within their control. This may include a cost center, which is an organizational segment, or a division, in which the manager has control over costs but not over revenue or investment decisions. Businesses are often broken into cost, revenue, and profit centers.
Please respond to all of the following prompts in the class discussion section of your online course:
Describe how a business you have worked for was organized. Was it decentralized or centralized? What control did managers have?If you had to choose, would you prefer to have management responsibility over a cost center, revenue center, or profit center? Explain your rationale.Would you rather work in a cost center, investment center, profit center, or revenue center of a company? Explain.