DB-Module 10: Evaluating Decentralized Operations

DB-Module 10: Evaluating

Decentralized Operations

Decentralized Operations

Sherry Smith is the president/CEO of Tiller Components. She founded the firm and has led it to become an industry leader in the area of automobile manufacturing components and parts. The company has plants in over 35 areas across the country. Smith is finding that she cannot manage and stay on track with things the way she was able to in the past.

Discuss the decision-making approaches (centralized and decentralized) that you might use if you were the CEO of Tiller Components and how this would affect the different local and regional managers.

• What activities would be conducted centrally and which would you decentralize?
• How would the shifts in this method of decision-making and management that you suggest impact the company overall?
• Further, how can the use of analytical tools assist Smith with better understanding how each of her divisions and segments are performing?

Directions:

• Discuss the concepts, principles, and theories from your textbook. Cite your textbooks and cite any other sources if appropriate.
• Your initial post should address all components of the question with a 500 word limit.

It is important to understand the formulas presented for calculating Return on Investment (ROI) and residual income and apply them by following the examples in the textbook. The brief videos also succinctly summarize the key points of this module.

Learning Outcomes

1. Explain how properly linked performance incentives and measures add value for all stakeholders in performance management and evaluation.
2. Examine cost centers, profit centers, and investment centers.
3. Interpret return on investment (ROI) and residual income.
4. Develop financial statements using vertical and horizontal analysis, liquidity, and profitability ratios.

Readings

Required:

• Chapter 10 in Managerial Accounting
• Bragg, S. (2022, April 29). Decentralized organizational structure. AccountingTools. https://www.accountingtools.com/articles/decentralized-organizational-structure (seminal)

Recommended:

• Chapter 10 PowerPoint slides in Managerial Accounting
• Vantrappen, H., & Wirtz, F. (2017, December 26). When to Decentralize Decision Making, and When Not To. Harvard Business Review. https://hbr.org/2017/12/when-to-decentralize-decision-making-and-when-not-to (seminal)

DB-Module 10: Evaluating Decentralized Operations
Decentralized Operations
Sherry Smith is the president/CEO of Tiller Components. She founded the firm and has led it to
become an industry leader in the area of automobile manufacturing components and parts. The
company has plants in over 35 areas across the country. Smith is finding that she cannot
manage and stay on track with things the way she was able to in the past.
Discuss the decision-making approaches (centralized and decentralized) that you might use if
you were the CEO of Tiller Components and how this would affect the different local and
regional managers.
• What activities would be conducted centrally and which would you decentralize?
• How would the shifts in this method of decision-making and management that you
suggest impact the company overall?
• Further, how can the use of analytical tools assist Smith with better understanding how
each of her divisions and segments are performing?
Directions:
• Discuss the concepts, principles, and theories from your textbook. Cite your textbooks
and cite any other sources if appropriate.
• Your initial post should address all components of the question with a 500 word limit.
It is important to understand the formulas presented for calculating Return on Investment (ROI)
and residual income and apply them by following the examples in the textbook. The brief videos
also succinctly summarize the key points of this module.
Learning Outcomes
1. Explain how properly linked performance incentives and measures add value for all
stakeholders in performance management and evaluation.
2. Examine cost centers, profit centers, and investment centers.
3. Interpret return on investment (ROI) and residual income.
4. Develop financial statements using vertical and horizontal analysis, liquidity, and
profitability ratios.
Readings
Required:
• Chapter 10 in Managerial Accounting
• Bragg, S. (2022, April 29). Decentralized organizational structure.
AccountingTools. https://www.accountingtools.com/articles/decentralizedorganizational-structure (seminal)
Recommended:
• Chapter 10 PowerPoint slides in Managerial Accounting
• Vantrappen, H., & Wirtz, F. (2017, December 26). When to Decentralize Decision Making,
and When Not To. Harvard Business Review. https://hbr.org/2017/12/when-todecentralize-decision-making-and-when-not-to (seminal)