When a company is decentralized, top management will have little time to focus on long-term strategy because they will be too focused on managing day to day operations. True O False Select all of the below that are advantages of decentralization. Decentralization allows companies to duplicate costs. Decentralization provides training. Decentralization improves customer and supplier relations. Decentralization improves motivation and retention.
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- Which of the following is not a reason for decentralizing? a. Training and motivating managers b. Unmasking inefficiencies in subdivisions of an overall profitable company c. Allowing top management to focus on strategic decision making d. Allowing top management to make all key operating decisions throughout the company e. All of these.A key advantage of a decentralized organization is _________. A. increased administrative costs B. quicker decisions and response time C. the ease of aligning segment and company goals D. duplication of effortsThe following strategic objectives have been derived from a strategy that seeks to improve asset utilization by more careful development and use of its human assets and internal processes: a. Increase revenue from new products. b. Increase implementation of employee suggestions. c. Decrease operating expenses. d. Decrease cycle time for the development of new products. e. Decrease rework. f. Increase employee morale. g. Increase customer satisfaction. h. Increase access of key employees to customer and product information. i. Increase customer acquisition. j. Increase return on investment (ROI). k. Increase employee productivity. l. Decrease the collection period for accounts receivable. m. Increase employee skills. The heart of the strategy is developing the companys human resources. Management is convinced that empowering employees will lead to an increase in economic returns. Studies have shown that there is a positive relationship between employee morale and customer satisfaction. Furthermore, the more satisfied customers pay their bills more quickly. It was hypothesized that as employees became more involved and more productive, their morale would improve. Thus, the strategy incorporated key objectives that would lead to an increase in productivity and involvement. Required: 1. Classify the objectives by perspective, and suggest a measure for each objective. 2. Prepare a strategy map that illustrates the likely causal relationships among the strategic objectives.
- When a Dupont analysis reveals that a company has much higher than average asset turnover and much lower than average profit margin, what can be concluded about the companys strategy? a. It is a product differentiator. c. It has no strategy. b. It needs to concentrate on improve- d. It is a low-cost provider ing its profit margins.What should an organization do if performance measures change? A. Make sure that the manager being evaluated is aware of the measurement change, as this may affect his or her decision-making. B. Make sure that the manager benefits without the corporation also benefitting. C. Make sure that there are significant overriding opportunities for each manager, if the manager is unaware of the change. D. Obtain customer surveys on the change before communicating the change to the manager.Continuous improvement is the governing principle of a lean accounting system. Following are several performance measures. Some of these measures would be associated with a traditional standard-costing accounting system, and some would be associated with a lean accounting system. a. Materials price variances b. Cycle time c. Comparison of actual product costs with target costs d. Materials quantity or efficiency variances e. Comparison of actual product costs over time (trend reports) f. Comparison of actual overhead costs, item by item, with the corresponding budgeted costs g. Comparison of product costs with competitors product costs h. Percentage of on-time deliveries i. First-time through j. Reports of value- and non-value-added costs k. Labor efficiency variances l. Days of inventory m. Downtime n. Manufacturing cycle efficiency (MCE) o. Unused (available) capacity variance p. Labor rate variance q. Using a sister plants best practices as a performance standard Required: 1. Classify each measure as lean or traditional (standard costing). If traditional, discuss the measures limitations for a lean environment. If it is a lean measure, describe how the measure supports the objectives of lean manufacturing. 2. Classify the measures into operational (nonfinancial) and financial categories. Explain why operational measures are better for control at the shop level (production floor) than financial measures. Should any financial measures be used at the operational level? 3. Suggest some additional measures that you would like to see added to the list that would be supportive of lean objectives.
- Instructions 1.Based on the balanced scorecard and the following descriptions of the predicted relationships between strategic objectives, draw the scorecards strategy map. a.Training employees effectively and reducing employee turnover can both be expected to improve returns processing and reduce shipping errors. b.Both improving returns processing and reducing shipping errors can be expected to delight the customer. c.Delighting the customer can be expected to increase market share. 2.Based on the balanced scorecard and the following descriptions of the predicted relationships between performance metrics, draw the scorecards measure map. a.Median training hours per employee and average employee tenure will both influence hours from returned to refunded and number of erroneous shipments. b.Both hours from returned to refunded and number of erroneous shipments will affect percentage of customers who shop again and online customer satisfaction rating. c.Both percentage of customers who shop again and online customer satisfaction rating will influence the companys market share. 3.Label each element of the balanced scorecard.Which of the following is not a qualitative decision that should be considered in an outsourcing decision? A. employee morale B. product quality C. company reputation D. relevant costsTwo departments within Cougar Gear Inc. are Production and Sales. Each department has a unique scorecard, as follows: The Production Department scorecard focuses on the learning and growth and internal processes perspectives. The Sales Department scorecard focuses on the learning and growth and customer perspectives. Both scorecards have the learning and growth performance metrics of median training hours per employee and average employee tenure. The Production scorecard has the unique metrics of production time per unit and number of production shutdowns. The Sales scorecard has the unique metrics of percentage of customers who shop again and online customer satisfaction rating. The performance targets for each metric are shown in the tan boxes just under the performance metrics. The actual achieved metrics are shown in the red boxes just below the tan boxes. When evaluating both departments, Cougar Gears management looks at the median training hours per employee and average employee tenure metrics and subsequently decides to give the Sales Department a large bonus while giving the Production Department a minimal bonus. a. Determine and define the type of cognitive bias Cougar Gears management has exhibited in this instance. b. Determine which department would have received the larger bonus had the companys management not been biased in the evaluation. c. Discuss one advantage and one disadvantage of using unique balanced scorecards for different departments or divisions of a company.
- Profit Corp. has a subunit classified as a cost center that supports other parts of the firm but has reported costs higher than what the corporate office would like to see. Thus, the manager of this subunit is under pressure to cut operating costs without hurting the perceived quality of services provided. What general recommendations could you give to the manager of this cost center to achieve that goal?The costs referred to as “controllable costs” are a. Costs which management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers. b. Costs which are likely to respond to the amount of attention devoted to them by a specified manager. c. Costs which are governed mainly by past decisions that established the present levels of operating and organizational capacity and which only change slowly in response to small changes in capacity. d. Costs which fluctuate in total in response to small changes in the rate of utilization of capacity.Why might relevant costs analysis be bad for a company if used too frequently? Multiple Choice It overemphasizes short-term goals and neglects long-term goals. It complicates the job of managers. It focuses too much on strategy and not enough on financial measures. It could lead to a permanent change in the production process of the company. It overemphasizes long-term goals and neglects short-term goals.