Question

respond to the following based on your reading. 11. what benefits result from decentralization? 12. distinguish cost centers, profit centers, and investment centers. 13. what is meant by the terms margin and turnover in roi calculations? 14. why do the measures used in a balanced scorecard differ from company to company?

Explanation:

1. Decentralization benefits include faster decision-making, employee empowerment, local market adaptation, and reduced top management workload.
2. Cost centers focus on cost control; profit centers manage both revenues and costs; investment centers control revenues, costs, and capital investments.
3. Margin = Operating Income / Sales (profitability per sales dollar); Turnover = Sales / Average Operating Assets (asset efficiency).
4. Balanced scorecard measures differ because companies have unique strategies, goals, industries, and operational contexts.

Answer:

1. Faster decisions, employee empowerment, local adaptation, reduced top management load
2. Cost centers: cost control; profit centers: revenue + cost management; investment centers: revenue + cost + capital control
3. Margin = Operating Income/Sales (profitability); Turnover = Sales/Average Operating Assets (asset efficiency)
4. Unique strategies, goals, industries, and operational contexts across companies