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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Which of the following is not a reason for decentralizing?

  1. a. Training and motivating managers
  2. b. Unmasking inefficiencies in subdivisions of an overall profitable company
  3. c. Allowing top management to focus on strategic decision making
  4. d. Allowing top management to make all key operating decisions throughout the company
  5. e. All of these.

To determine

Identify the statement which is not a reason for decentralizing.

Explanation

Decentralization:

Decentralization can be defined as the practice of assigning the responsibility of decision-making to the managers at the lower level. It allows the managers to make the decision and implement it to the areas of responsibility.

d.

Under centralized decision making, the decisions are made by the top-level managers and the lower level managers are obliged to implement those decisions. In this approach, the delegation of responsibilities does not take place. Therefore, this option is correct.

a.

Decentralization provides training to the segment managers and motivates them towards the organizational goals...

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