Team HoZoBoRoLo
Course title: Cost and Management Accounting
Course Code: BBA 201
Team Member:
S.M.NURNOBI
Tufahel Ahmed
Syea Nadir Ahmed
Md Zahid Mahmud Emon
Topic: Segment reporting Decentralization & Balance scorecard
2. TeamHoZoBoRoLo
Course title: Cost and Management Accounting
Course Code: BBA 201
Team Member:
S.M.NURNOBI
ID:170103020022
Tufahel Ahmed
ID: 170103020018
Syea Nadir Ahmed
ID:170103020010
Md Zahid Mahmud Emon
ID:170103020030
Course Teacher:
Jahanjeb Ibne Khaled
Lecturer
Dept. of Business Administration
3.
4. Segment Reporting
Effective decentralization requires segmented reporting.
A segment is a part or activity of an organization about
which managers would like cost, revenue, or profit data.
Segment reporting is the reporting of the operating
segments of a company in the disclosures
accompanying its financial statements. Segment
reporting is required for public held-entities, and is not
required for private-held ones.
5. Decentralization
Decentralization is the process by which the
activities of an organization, particularly those
regarding planning and decision-making, are
distributed or delegated away from a central,
authoritative location or group.
6. Decentralization in organizations
In a decentralized organization, decision-making
authority is spread throughout the organization rather
than being confined to a few top executives.
Organizations do differ, however, in the extent to
which they are decentralized. In strongly centralized
organizations, decision-making authority is reluctantly
delegated to lower-level managers who have little
freedom to make decisions. In strongly decentralized
organizations, even the lowest-level managers are
empowered to make as many decisions as possible.
Most organizations fall somewhere between these
two extremes.
7. Advantages of Decentralization
1. By delegating day-to-day problem solving to
lower-level managers, top management can
concentrate on bigger issues such as overall
strategy.
2. Granting decision-making authority helps train
lower-level managers for higher-level Positions.
3. Empowering lower-level managers to make
decisions can increase their motivation and job
satisfaction.
4. By eliminating layers of decision making and
approvals, organizations can respond more quickly
to customers and to changes in the operating
environment.
8. Major Disadvantages of Decentralization
1. Lower-level managers may make decisions
without fully understanding the big picture.
2. If lower-level managers make their own
decisions, coordination may be lacking.
3. Lower-level managers may have objectives
that clash with the objectives of the entire
organization.1 For example, a manager may be
more interested in increasing the size of his or
her department, leading to more power and
prestige, than in increasing the department’s
effectiveness.
9. Responsibility Accounting
The three primary types of responsibility centers are
1. Cost centers
2. Profit centers
3. Investment centers
The term responsibility center is used for any part of an
organization whose manager has control over and is
accountable for cost, profit, or investments.
Types of responsibility accounting
10. 1. Cost Centers
The managers of cost centers are expected to minimize costs
while providing the level of products and services demanded
other parts of the organization.
2. Profit Center
The manager of a profit center has control over both costs
revenue, but not over the use of investment funds.
3. Investment Center
The manager of an investment center has control over cost,
revenue, and investments in operating assets
