Responsibility accounting involves accumulating and reporting costs on the basis of the manager who has the authority to make the day-to-day decisions about the items. In this discussion you will review the importance of responsibility accounting in a centralized or decentralized company.

Centralized or Decentralized? View the organizational structure descriptions before answering the questions below.

1. Characterize businesses that you have previously worked for or currently work for as centralized or decentralized, more vertical (taller) or flatter. How did you make this determination? What impact would this have on the three types of company responsibility centers?
2. If you were to structure your own company, would it be centralized or decentralized, taller or flatter, and why? What are the benefits or drawbacks to the type of business you would own? Explain whether you would use flexible or static budgeting or not. Why or why not?