MA garrison C11 performance measurement in decentralized organizations

owners(shareholders) ---- corporate governance systems. ------management control systems

advantages
1------ top-level managers focus on bigger issues
2------ low-level have detailed and timely information
3------ eliminate layers of decision making/approval ef
4------ training low for high
5------ increasing low\'s motivation and job satisfaction

disadvantages
1------ decision making lacks fully udstding strategy
2------ lacking coordination
3------ objective clash due to interest
4------ innovative ideas can\'t spd over the organization

responsibility accounting
responsibility center----- used for any part of an organization whose managers has control over and is accountable for cost, profit or investments

cost center
control over costs but not over revenue or the use of investment funds ( e.g. manufacturing facilities )

profit center
has control over both costs and revenue, but not over the use of investments (e.g. a division, a outlet)

investment center
has control over cost, revenue and investments in operating assets ( e.g. a subsidiary company )

evaluating investment center performance ----return on investment
ROI = net operating income / average operating assets

net operating income = EBIT. before interest and taxes
operating assets ---- include cash, accounts receivable, inventory, plant and equipment and all other assets held for operating purposes