Question

Explain the implication (below - the fixed asset cycle) and provide a recommendation. To prepare this analysis, use the following table structure:

Weakness	Implication	Recommendation

Fixed asset cycle:

• Middle-level management is able to approve asset purchases up to $5,000.

Answer 1

Weakness	Imlication	Recommendation
Middle management is responsible for taking out work from the supervisor level and the top level management is responsible for setting objectives. Limiting the roles will lead to involving top level management whose role is to set objectives and it’s the role of middle level management to define and carry out tasks. For taking decision related to assets more than $5000, everytime middle management will have to take approval from top management and this will slower the growth and working.	Taking approval everytime for assets more than $5000 will lead to a lot of time being wasted in getting approvals and hence the working will be delayed. There will be lack in efficient use of resources.	If the limit still persists, there should be a system where if there is an urgency in purchase of assets more than $5000, middle level management can take the role in their hands and can do so by giving a prior notice of the purchase and the reason for purchase. This way they will be justifying their actions which are not in their hands.