Question

1. In TWO sentences, describe Management by Exception.

2. List THREE advantages of Decentralization.

3.

For EACH of the following responsibility centers, describe what the manager is responsible for.:

1. Cost Center
2. Revenue Center
3. Profit Center
4. Investment Center

Answer 1

1. Management by exception is the practice of business management that focusses on identifying and handling cases that deviate from the norn ,

It has both a general business application and a business intelligence application, It is the practice of investigating, resolving and handling cases by using skilled staff and software tools

2.The advantages of decentralisation are as follows:-

- Motivation of subordinates- It improves the level of job satisfaction as well as employee moral, especially among lower level mangers

- Growth and Diversification- Under decentralisation every single product division attaines sufficient autonomy to exercise there creative flair, they even develop managerial skills and help in solving the succession problem which ensures the growth and continuity of an organisation

- Efficient Communication - The wider span of management under decentralisation leads to fewer hierarchy level. This makes the communication system more efficient as intimate relationships develop between superior and subordinates.

3. COST CENTER - The manages of the cost centre such as human resources and accounting departments are responsible for keeping there costs in line or below budget.

PROFIT CENTRE- In a profit centre the manger is responsible for the revenues generated by the subunit , In the course of normal business operations.

INVESTMENT CENTRE- In an investment centre the manager is responsible for investment decisions as well as cost and revenue.