Decentralization divides company operations into various reporting units. Most decentralized subunits can be described as one of four different types of responsibility centers. Requirements 1. Explain why companies decentralize. Describe some typical methods of decentralization. 2. List the four most common types of responsibility centers, and describe their responsibilities. Requirement 1. Explain why companies decentralize. Describe some typical methods of decentralization. Companies usually decentralize when they to manage the entire organization's daily operations. Decentralization is often based on: become too small for one management group become too small for one person grow too large for one management group grow too large for one person Requirement 2. List the four most common types of responsibility centers, and describe their responsibilities Responsibility centers Description of responsibilities 1 V 2 4 Decentralization is often based on: brand business function customer base decentralization is not widely used geographical area individual employee - individual store product line S D Requirement 2. List the four most common types of responsibility centers, and describe their responsibilities. Responsibility centers Description of responsibilities 1 2 3 4 Cost Center Customer Perspective Center Internal Business Center Investment Center Learning and Growth Center Profit Center Revenue Center Requirement 2. List the four most common types of responsibility centers, and describe their responsibilities. Responsibility centers Description of responsibilities 1 2 3 responsible for controlling costs responsible for creating value responsible for customer satisfaction responsible for generating profit and efficiently managing the division's invested capital responsible for generating profit through controlling costs and generating revenue responsible for generating revenue responsible for monitoring business processes