Reference no: EM133728684
Discussion Post: Accounting- Evaluating Decentralized Operations
Learning Outcomes
1) Explain how properly linked performance incentives and measures add value for all stakeholders in performance management and evaluation.
2) Examine cost centers, profit centers, and investment centers.
3) Interpret return on investment (ROI) and residual income.
4) Develop financial statements using vertical and horizontal analysis, liquidity, and profitability ratios.
Decentralized Operations
Sherry Smith is the president/CEO of Tiller Components. She founded the firm and has led it to become an industry leader in the area of automobile manufacturing components and parts. The company has plants in over 35 areas across the country. Smith is finding that she cannot manage and stay on track with things the way she was able to in the past.
Discuss the decision-making approaches (centralized and decentralized) that you might use if you were the CEO of Tiller Components and how this would affect the different local and regional managers.
1) What activities would be conducted centrally and which would you decentralize?
2) How would the shifts in this method of decision-making and management that you suggest impact the company overall?
3) Further, how can the use of analytical tools assist Smith with better understanding how each of her divisions and segments are performing?