Nam Bounty Cookies Enterprise, NaBCE, is a registered SME that is specialised in bakery of banana bread, Cake break, apple bread etc. The enterprise is based in Ghana. It has recently acquired two companies: My God is Alive Bakery, MyGAB and Christ is the Answer Bakery, CITAB. MyGAB is a well-established bakery that is almost a household name in Ghana. It brings to bare novelties in bakery industry. MyGAB has come out with special bakery products especially in diet sensitive bread, diabetes free bread, etc. MyGAB was a direct competitor to NaBCE. CITAB, which is based in Togo, is a new but rapidly growing bakery that specialised in Sakomie Special. CITAB was acquired to bake Sakomie Special and feed MyGAB and NaBCE. The Managing Director of NaBCE has now realized that the acquisition of these two companies will cause problems for him in terms of planning, control and decision making. He is thinking of implementing a completely decentralized structure but is unsure of advantages and disadvantages of such a structure, of how much autonomy to grant the new bakeries, and also which performance measure to use to appraise their performance. Consequently he has contacted you, the Finance Director of NaBCE, for help.

Required:

a. explain the advantages and disadvantages that would be experienced by NaBCE in operating a decentralized structure.

b. explain which types of responsibility centers you would recommend as being most appropriate for MyGAB and CITAB in a decentralized structure.

c. With reference to 4(b), outline the performance appraisal issues that are likely to be considered for the responsibility centers, if any.