Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 22 - Management Control Systems, Transfer Pricing, and Multinational Considerations - Assignment Material - Questions - Page 865: 22-5

Answer

No, organizations don't consistently adopt either centralization or decentralization across all business functions. They often use a mix of both to match the specific needs of each function.

Work Step by Step

No, I don't agree. Organizations often do not adopt a uniform decentralization or centralization philosophy across all their business functions. The appropriate level of centralization or decentralization can vary depending on the specific needs and characteristics of each business function. For example, financial functions might benefit from centralization for consistency and cost control, while sales and customer service functions could require decentralization to respond effectively to local market dynamics. Therefore, a mix of centralization and decentralization is commonly employed to align with the unique requirements of each business function within an organization.
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